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Vietnam’s trade in goods in ASEAN

July 28, 2020 marked a quarter-of-century time Vietnam officially joined ASEAN- Association of Southeast Asia Nations. Joining ASEAN was a breakthrough step of Vietnam, forming the basis for international integrations, globalization and free trades. After a quarter of a century joining ASEAN, regional cooperation relationship among Vietnam and ASEAN countries is getting comprehensive and have great impacts on Vietnam’s socio-economic and political life, contributing in improving Vietnam’s positions in regional and the world’s cooperation forums.

Joining ASEAN was a breakthrough step of Vietnam, forming the basis for international integrations, globalization and free trades

According to surveyed data from the General Department of Vietnam Customs, the total trade turnover between Vietnam and ASEAN in 2019 reached USD 57bn, a 10-time increase compared to that 25 years ago- accounting for 11% of the total import-export turnover of the country. In the ASEAN, Vietnam ranked 3rd in import-export, after Singapore and Thailand. Besides, ASEAN ranked 4th in term of Vietnam’s largest export market, after those of EU, the US and China.

Vietnam’s import turnover from asean countries - Source: collected from uncomtra

The balance of trade has been inclined to deficit with ASEAN countries, and in 20 years joining ASEAN, Vietnam has not had a trade surplus with it. However, the deficit is necessary: Vietnam has had great demand on input materials for production, ASEAN market, with advantages of geographical position, can provide materials of low prices thanks to low transport freight; import taxes on these ones are 0% due to special incentives. Therefore, the deficit is significant in Vietnam’s economic development in the situation. Besides, as we can see from the chart, the average export growth is 3% - 5% higher than the average import growth from ASEAN annually, the deficit is getting smaller and can be under control, which can be balanced in the future.

Vietnam’s export turnover to asean countries Source: collected from uncomtrade

However, considering individual countries, Vietnam has had trade surplus with Cambodia, the Philippines, Myanmar and Laos and has had trade deficit with the rest of countries in ASEAN. Vietnam has had a lot of exports to Thailand, Malaysia, Singapore, Indonesia, Cambodia and the Philippines and has had imports from Thailand, Malaysia, Indonesia and Singapore.

Before 2010, Vietnam mainly exported traditional products as crude oil and rice to ASEAN market. Currently, exported products are plentiful. Vietnam’s main exported goods to ASEAN are phones of various kinds and spare parts, computers, electronic products and spare parts, steel of all kinds; machines and spare parts… with various sectors with obvious competition advantages. Some products with technological content such as photographic equipment, galvanized steel and ships have appeared in Vietnam’s exports, showing a positive change in the export structure of the economy. Besides, other products have been Vietnam’s enterprises’ advantages as garment and textile, footwear, aqua products, coffee, and rubber. The growth in Vietnam’s export to ASEAN market is thanks to two factors: (1) increasing market demand; (2) existing advantages exploited.

It can be said that joining ASEAN helps Vietnam improve her position, forming a basis for her faster steps to international integration. However for sustainable regional developments, cooperation and economic, integration, Vietnam needs to have appropriate orientations and policies.

Throughout the 25 years of being an active member in ASEAN, even though being a late member and having distance in term of developments to many countries, Vietnam has always shown her good wills, effort and responsibilities, contributing significantly to ASEAN’s overall achievements on the three pillars of of politics-security, economy and socio-culture. From an underdeveloped country badly affected by wars and embargo, Vietnam has had steps to affirm her role and position in global cooperation. After a quarter of century with ASEAN, Vietnam has left bold prints recognized by friends and partners. It can be said that joining ASEAN helps Vietnam improve her position, forming a basis for her faster steps to international integration. However for sustainable regional developments, cooperation and economic, integration, Vietnam needs to have appropriate orientations and policies.

The Government should provide businesses and people more information and understanding about the ASEAN Economic Community, including communication programs, publications, and references; organizing annual seminars in provinces and cities across the country. The Government should also have solutions to restructure production to improve quality, added value, and competitiveness for businesses; add more solutions to support businesses in trade promotion, market research and forecasting, technology innovation, brand protection, human resource training, infrastructure development and improvement of business environment. The Government should also joint business and strengthen the supporting and role of industry associations. In addition, businesses themselves and people need to proactively prepare and coordinate with the Government, such as proactively accessing information about the ASEAN Economic Community, and actively grasping the Government’s policies to support for investment, business and development in line with Vietnam’s orientation to improve quality, competitiveness and added value in production in the coming time.

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