General aviation pilot reported a NMAC nearly occurred due to the pilots of the aircraft involved making position report mistakes. The reporter stated that in their opinion the VUO airport's poorly designed airspace structure was the main cause of the NMAC event.

Narrative

The conditions VMC; daylight; clear skies; 10+ visibility. I was inbound to VUO via the cutout from the West. I was using traffic advisories; and Portland Approach released me to CTAF several miles west of Vancouver Lake. When released from Approach; I made a position announcement on VUO CTAF. I had been monitoring VUO CTAF and knew there was one aircraft; Aircraft Y; flying a closed pattern in Runway 08. Aircraft Y announced they were downwind; and made a general request for position. I responded that I was a few miles west of the south shore of Vancouver Lake. I made another position announcement that I was just west of Frito-Lay and asked Aircraft Y if they were still in the downwind or had turned base. They replied; Aircraft Y turning base...Uh...we'll extend base...for Aircraft X." This was extremely confusing since I was well to the west of the pattern and had expected that Aircraft Y would at least be in their base; if not on final or even landed by the time I got to the Railroad Switchyard. There was another aircraft inbound to VUO; Aircraft Z; not involved in this event other than taking my time to locate and track its progress. After locating Aircraft Z above and to my left; upon returning my attention toward Aircraft Y was within a couple of hundred feet separation at my 1 o'clock. They were slightly below and had started making an evasive turn towards the south - to their left; my right. I announced on CTAF that they had just passed under my nose and what was their intention - if they were leaving the area to the West or still landing. This was just west of Frito-Lay which is somewhat northwest of what I would consider to be the normal pattern. Looking back at ADS-B data; at our closest approach Aircraft Y made this left 90-degree turn to the south; then a right 270 into a long final behind me. I continued to a normal landing; then Aircraft Y landed and then Aircraft Z landed.I spoke with PIC of Aircraft Y after landing and we discussed the event. The PIC indicated he had not been to Pearson for a number of years but was familiar with the commonly used reporting points (e.g.; Vancouver Lake; Frito-Lay; Railroad Switchyard; etc.). He indicated that they were confused by my position reports but did not ask for clarification. I should note that I think all three aircraft made at least one mistake in their position reports; e.g.; misidentifying which runway; right/left; downwind/base; etc. I can't remember exactly; but in my case I may have said my intent was to 'enter a right base for 08' when I should have said 'left base.'Other than everyone's minor mistakes in radio calls; and what could have been more position reports; I cannot identify any pilot error of either Aircraft Y or myself that lead to this near collision. However; I believe we both could have made more position announcements and been quick to ask for clarification when the reporting was vague; or something was incorrectly stated.I believe the primary cause of this near collision is the result of FAA inaction regarding this dangerous airspace. The funnel-creating cut-out to the west of Pearson Field is simply a poorly designed airspace meant to force fit an airport under PDX Class C. The FAA needs to address this hazard and either invest in a new airport further north along I-5 and close Pearson Field; put a Control Tower at Pearson; or put under PDX Control via cameras + radar; or create explicit entry and exit flyways and procedures into and out from VUO.Option 3 will require different procedures depending on the active runway so VUO ASOS should explicitly identify the active runway at VUO. When the aligned wind component is less than 5 kt.; the active runway should match PDX traffic. When the aligned wind component is greater than 5 kt.; the active runway should be the best wind runway. Then the FAA needs to explicitly define approach and departure corridors based on the active runway. When the active runway is 26; departing cutout traffic should fly directly towards the south shore of Vancouver Lake and then continue west to the Columbia River before taking their departure heading. Arriving traffic should report at the north shore of Vancouver Lake; then Frito-Lay; then into the right downwind for 26. To better separate this downwind merging; downwind departures - north shore transition - should have an elevated downwind corridor of 1100 MSL; moving the floor of PDX C up 100 ft.; while landing traffic should keep their downwind at 900 ft. Long straight-in approaches to Runway 26 from the east should be strongly discouraged (i.e.; north shore arrival or PDX midfield crossing. Inbound from the East should fly to Vancouver Mall; then either a right base into 26 or fly westward while on the north side of WA500 until they are able to do a left 180 to merge into the downwind traffic.When the active runway is 08; arriving traffic should report at the south shore of Vancouver Lake; then Frito-Lay; then follow the railroad tracks into final. During congested periods; or as needed for spacing; arriving aircraft could also continue east from Frito-Lay followed by right 180 to enter the Runway 08 downwind. Runway 08 traffic departing via the cutout should fly a long cross-wind until north of WA500; then turn to their departure heading either west of I-5 or the north shore of Vancouver Lake. It is unconscionable for the FAA to continue to ignore this incredibly dangerous airspace. Putting well defined arrival / departure procedures in place will cost nothing and could save lives of both those flying and those on the ground."