Food Safety in International Trade and the Political Economy in Vietnam

Abstract

Vietnam, a transitional economy, has successfully implemented economic reforms over the past three decades, becoming one of Asia's fastest-growing economies in terms of trade. However, research on food safety in international trade and the political economy in Vietnam remains limited. This thesis contributes to the existing literature by focusing on three selected issues.

Following the introductory chapter, Chapter 2 examines the impact of five maximum residue limits (MRLs) on coffee and rice exports in Vietnam. In recent decades, bilateral and regional trade agreements have significantly reduced tariffs. However, non-tariff measures, such as food safety standards (FSS), have emerged as a possible impediment to international trade, particularly for developing countries. Despite this, the impact of FSS on trade performance remains unclear due to limited empirical evidence. This chapter examines the case of Vietnam which ranks among the top three exporters of these commodities globally. Analysis of panel data from 2002-2017 indicates that only the Azoxystrobin MRL restricts coffee exports, while other MRLs have no effect on trade. Notably, Azoxystrobin represents one of the four main groups of plant protection compounds (fungicides) that are highly harmful to humans and are widely used in agricultural production in developing countries. The findings suggest that not all food safety standards are trade-restrictive, and that trade-restrictive ones might actually serve the purpose of protecting human health.

Chapter 3 investigates the spillover effects of agricultural exports on food poisoning outbreaks in Vietnamese families from 2007 to 2016, utilizing a unique dataset on domestic food poisoning incidents at the provincial level. The findings indicate that agricultural exports, economic governance quality (proxied by Provincial Competitiveness Index) and the number of local internet users contribute to a reduction in the number of food poisoning outbreaks in Vietnamese families. In contrast, the volume of freight traffic circulating through a province correlates with an increase in food poisoning incidents. Government spending on health, food expenditure, and family literacy were not found to have a statistically significant influence on the number of food poisoning outbreaks.

Chapter 4 examines the impact of political leader rotations on key provincial economic outcomes in Vietnam, including exports, registered foreign direct investment (FDI), implemented FDI, and economic governance quality (proxied by Provincial Competitiveness Index), from 2005 to 2020. Employing a fixed-effects estimator, the empirical analysis reveals that (1) provinces with leaders appointed from Central Agencies exhibit improved export performance and higher registered FDI capital compared to those with political leaders originating from the same province; (2) political leaders transferred from other provinces have a negative impact on the economic governance quality of their destination provinces relative to leaders from the same province; and (3) only leaders transferred from provinces outside their birthplace region positively influence provincial exports. These findings offer valuable insights into the effective implementation of leader rotation policies to enhance economic development in Vietnam.

All three chapters of this thesis employ panel data and adopt an empirical approach. The findings of these investigations establish a foundation for policymakers to develop related policies aimed at improving food safety, augmenting exports, and promoting social and economic development, while also guiding future research in these fields.