Vietnam after nearly 30 years of international economic integration

1. Current status of Vietnam's international economic integration

International economic integration is understood as the process of linking a country's economy with the world economy through trade agreements to create a common legal framework to coordinate and regulate economic relations between countries.

In recent years, international economic integration has become an important driving force for the country's economic development. Since 1986, when Vietnam began to reform, open its economy and implement a policy of multilateralization in international relations, the country has entered a period of strong integration. However, it was not until 1995, when Vietnam joined ASEAN and the United States announced the normalization of diplomatic relations with Vietnam, that Vietnam's international economic integration process really went into depth.

Joining ASEAN marked a major turning point in the integration process. Although joining later than other ASEAN countries and starting from a weak economy, Vietnam has made constant efforts in all areas from economics to diplomacy, contributing to enhancing its position in ASEAN and the Asia-Pacific region. Political stability and strong economic growth have helped Vietnam become a country with a strong voice in solving regional issues, especially those directly related to national interests such as the East Sea, climate change, water resource management of the Mekong River, anti-terrorism, and drug trafficking prevention.

Thanks to that, Vietnam's international position and prestige have been constantly enhanced, affirming its active and responsible role in maintaining peace, development cooperation and promoting global progress.

From the initial success of the international economic integration process, Vietnam continued to participate in and chair many important regional forums such as: Asia-Europe Economic Cooperation Forum (ASEM), Asia-Pacific Economic Cooperation Forum (APEC), especially, Vietnam officially became a member of the World Trade Organization (WTO) in 2007 - marking Vietnam's comprehensive and complete integration into the global economy.

Vietnam has participated in the development and responsible implementation of important new-generation free trade agreements (FTAs), including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP), the Vietnam-European Union Free Trade Agreement (EVFTA) and the Investment Protection Agreement (EVIPA). In addition, Vietnam has successfully chaired and organized many major international events, fulfilling its international responsibilities as a non-permanent member of the United Nations Security Council and ASEAN Chair for the 2010 and 2020 terms. In particular, Vietnam has officially participated in United Nations peacekeeping operations, contributing to ensuring non-traditional security and promoting the global peace mission.

Through international economic integration, Vietnam has developed a number of key economic sectors, improved productivity, product quality and enhanced competitiveness in the international market. Our country has also attracted a lot of foreign investment thanks to its stable political environment and strategic location in Southeast Asia. At the same time, Vietnam has diversified its export markets, reduced its dependence on traditional markets and achieved a trade surplus, demonstrating sustainable development and competitiveness in the global market.

2. Vietnam's achievements after nearly 30 years of international economic integration

As an open economy, Vietnam always upholds multilateralism, respects international law, supports and actively participates in many economic cooperation and association initiatives. Proactive and active international economic integration has promoted trade relations between Vietnam and other countries and international organizations to become increasingly in-depth and substantial, bringing positive economic efficiency. In particular, trade relations between Vietnam and major economies in the world such as the United States, the EU, and China have increasingly developed and achieved many positive results. In the first 9 months of 2024, the preliminary trade balance of goods had a surplus of 20.79 billion USD. The United States is Vietnam's largest export market with a turnover of about 89.5 billion USD. China is Vietnam's largest import market with a turnover of about 105 billion USD1.

In the nearly three decades since Vietnam joined ASEAN, Vietnam has continuously made breakthroughs with other ASEAN countries, becoming a dynamic economic region. Vietnam's economic share in ASEAN's total GDP has increased sharply and nearly doubled from less than 6% in 2000 to about 12% in 2023. During the 2010-2021 period, trade between Vietnam and ASEAN has grown significantly, with export turnover increasing from 9.3 billion USD in 2010 to 29.1 billion USD in 2021 and reaching 73 billion USD in 20232. In the first 9 months of 2024, exports to the ASEAN market reached 27.33 billion USD, up 13.6%, equivalent to an increase of 3.27 billion USD over the same period last year, and imports reached 34 billion USD, up 13%, equivalent to an increase of 3.9 billion USD over the same period last year3.

If joining ASEAN has created favorable conditions for Vietnam to expand its comprehensive strategic partnership with countries in the ASEAN region, promoting the strategic partnership and comprehensive partnership with the United States has helped Vietnam expand its trade relations with all developed countries in the world . If counted in ASEAN, Vietnam is the largest trading partner of the United States and vice versa, the United States is also the largest export market of Vietnamese enterprises, accounting for nearly 30% of the country's total export turnover. Since the United States normalized diplomatic relations with Vietnam in 1995, trade relations between Vietnam and the United States have increased 275 times, from 450 million USD in 1995 to 124 billion USD in 2023. In the first 9 months of 2024, the export value to the US market reached 88.16 billion USD, an increase of 25.6% (equivalent to an increase of 17.96 billion USD) over the same period last year and accounting for 29.4% of the country's total export value4. The United States is currently the 11th largest foreign investor out of 108 countries investing in Vietnam with a total of 1,340 projects and a total investment capital of 11.8 billion USD. In contrast, Vietnam has 230 investment projects in the United States with a total investment capital of 1.3 billion USD. Including large corporations such as FPT, VinFast...5

Along with impressive results in trade relations with ASEAN countries and the United States, Vietnam also focuses on economic cooperation with EU countries. Since the EVFTA took effect, Vietnam has been the country with the leading export turnover to the EU market. Vietnam - EU trade relations have developed very quickly and effectively; two-way turnover increased more than 12 times from 4.1 billion USD in 2000 to nearly 50 billion USD in 2020; of which Vietnam's exports to the EU increased nearly 13 times from 2.8 billion USD to 35.1 billion USD in 2020. In the first 9 months of 2024 alone, exports to the EU reached 38.02 billion USD, an increase of 17%, equivalent to an increase of 5.51 billion USD over the same period last year. Besides, Vietnam's import turnover of goods in the first 9 months of 2024 from the EU market reached 12.26 billion USD, an increase of 10.6% (equivalent to an increase of 1.18 billion USD)6.

In trade relations with China, Vietnam has signed important agreements such as the ASEAN-China Free Trade Area Agreement (ACFTA) and the Regional Comprehensive Economic Partnership Agreement (RCEP). In 2018, the total bilateral trade turnover between Vietnam and China exceeded the 100 billion USD mark for the first time. Since then, the trade turnover between the two countries has continuously increased, specifically: in 2019 it reached 111.86 billion USD, in 2020 it reached 133.1 billion USD and during the Covid-19 pandemic years it also reached a high level, with 165.88 billion USD in 2021 and 175.56 billion USD in 2022; in 2023, the total bilateral trade turnover reached nearly 171.2 billion USD, accounting for more than 25% of the country's total import-export turnover. In the first 9 months of 2024, Vietnam's export value to China reached 44.39 billion USD, up 4.1%, equivalent to an increase of 1.75 billion USD over the same period last year. The total import value from this market reached 104.81 billion USD, up sharply by 32.4%, equivalent to an increase of 25.63 billion USD over the same period last year, accounting for 35% of the country's total import value7.

However, in the context of profound adjustments in the world economy and increasingly fierce strategic competition, especially the trade tensions between the United States and China, global economic and trade relations have been significantly affected. As the global economy develops, competition becomes increasingly fierce, requiring businesses to constantly innovate to maintain and expand market share. E-commerce and information technology have become key tools in international trade, but at the same time, they also bring risks of information leakage, technology theft and data security. Along with that, climate change and disease outbreaks pose serious challenges in international trade. These changes can disrupt supply chains and affect the production capacity of companies...

In addition, Vietnam still has some "bottlenecks" in the development process such as: The process of transforming the economic growth model is not fast; the results of disbursement of public investment capital are still low; exports have achieved high growth but still have many unpredictable risks; some key export products still face difficulties, technical barriers as well as anti-dumping investigations; the legal policy system is still incomplete, needing to be regularly reviewed and supplemented to comply with international law. On the other hand, profound changes in social life, environment, income inequality, and population aging are creating significant challenges for Vietnam's international economic integration process.

These challenges require Vietnam to continue to reform strongly, improve growth quality and affirm its position in the context of a constantly changing global economy.

3. Some policy implications to improve the effectiveness of Vietnam's international economic integration in the new context

Firstly, it is necessary to continue to innovate theoretical and practical thinking on the country's international economic integration, closely linked to the development of an independent, self-reliant economy in the direction of socialism in the new global context. Continue to consistently implement Vietnam's policy on international economic integration in the direction of promoting comprehensive, deep, flexible and effective international integration for the benefit of the nation, people and people; maximize internal resources, mobilize external resources, of which internal resources are the most important. On that basis, the Government needs to continue to closely direct and urge ministries, branches and localities to develop and implement comprehensive strategies and plans suitable to the characteristics and potentials of each region.

At the same time, the Government and ministries and sectors need to proactively and actively participate in negotiating and signing new-generation free trade agreements with developed countries, especially those in the EU. In addition, it is necessary to continue to consolidate and expand the recognition of Vietnam as a market economy by other countries, thereby creating more favorable conditions for Vietnam on the path of deep and sustainable integration.

Second, focus on transforming the economic growth model in depth, making science and technology and innovation the main driving force for the development of key economic sectors. The goal is to enhance the independence, autonomy and self-reliance of the economy in the process of international integration. In parallel with maintaining and developing traditional markets, it is necessary to focus on finding and expanding new markets for Vietnamese goods, services and labor, especially towards EU countries and developed countries.

Vietnam needs to effectively exploit domestic resources, including natural resources and labor, while taking advantage of external resources such as investment capital, advanced technology, and management experience to accelerate the process of comprehensive and effective international economic integration. Along with that, it is necessary to continue promoting the process of innovation and restructuring of state-owned enterprises, ensuring compliance with commitments in new-generation free trade agreements that Vietnam has signed.

Third, legislative bodies need to continue to make efforts to build and perfect the legal system, mechanisms and policies that are still inadequate and problematic, in order to promptly remove difficulties, effectively implement legal documents into practice, enhance the competitiveness of the economy, improve the investment and business environment, thereby contributing to promoting the country's deep and comprehensive international integration process.

In addition, state management agencies need to review, amend, supplement and issue new legal documents within their authority, ensuring compliance with Vietnam's international commitments in the process of global economic integration. In particular, pay special attention to participating in FTAs such as CPTPP, RCEP, EVFTA, EVIPA... to create a favorable legal corridor, support sustainable development and enhance the competitiveness of the Vietnamese economy. Actively work with countries to promote negotiations, signing, ratification and implementation of unilateral FTAs; negotiate new generation bilateral FTAs with countries, especially with major trade partners.

Fourth, promote reform of the state apparatus to meet the requirements of international economic integration. Focus on building digital government, improving the effectiveness of administrative reform towards building a creative and modern administration, taking people and businesses as the main service objects. Encourage and create maximum favorable conditions to support domestic enterprises to start up, innovate, improve techniques and production technology to improve business efficiency and enhance the competitiveness of enterprises in the market.

Fifth, effectively attract foreign direct investment (FDI) to serve the process of international economic integration, especially capital from green credit institutions. Continue to improve the system of mechanisms and policies to attract FDI in the fields of semiconductor industry, artificial intelligence technology, Fintech, virtual reality, Blockchain. At the same time, improve the legal system on state management of investment activities of Vietnamese enterprises abroad; strengthen guidance, inspection, supervision, and support for investment projects of Vietnamese enterprises abroad to be transparent and effective, contributing to improving the competitiveness of Vietnamese enterprises in the international market.

Vietnam after nearly 30 years of international economic integration

Abstract: After nearly 30 years of international economic integration, since Vietnam joined the Association of Southeast Asian Nations (ASEAN) in 1995 and the United States normalized diplomatic relations with Vietnam, our country's average economic growth rate has reached about 7%/year. The article presents the current situation and achievements Vietnam has achieved since its international economic integration, especially the trade relations between Vietnam and countries in the ASEAN region, the European Union (EU), the United States and China; and suggests policy implications to improve the effectiveness of Vietnam's international economic integration in the new context.

1. Current status of Vietnam's international economic integration

International economic integration is understood as the process of linking a country's economy with the world economy through trade agreements to create a common legal framework to coordinate and regulate economic relations between countries.

In recent years, international economic integration has become an important driving force for the country's economic development. Since 1986, when Vietnam began to reform, open its economy and implement a policy of multilateralization in international relations, the country has entered a period of strong integration. However, it was not until 1995, when Vietnam joined ASEAN and the United States announced the normalization of diplomatic relations with Vietnam, that Vietnam's international economic integration process really went into depth.