Leading economic partner
The ASEAN Economic Community (AEC) has entered its fourth year of development since the founding milestone of December 31, 2015, and is striving to realize its Vision to 2025 with initial encouraging results. The AEC has created a relatively synchronous production space, which helps promote the common advantage of the ASEAN region. Goods, services, capital, investment and skilled labor will be freely circulating within ASEAN without suffering any discrimination between the member states. Its intra-bloc economic cooperation efforts with partners have brought ASEAN member states stable economic growth, forecast to reach 4.9 percent in 2019, nearly double the world average.
In the 24 years since Vietnam joined the bloc, its members have become the country’s leading economic and trade partners. Compared to 1996, when Vietnam began to participate in the ASEAN Free Trade Area (AFTA), trade between Vietnam and ASEAN has grown by more than 9.5 times from US$5.9 billion in 1996 to approximately US$56.3 billion in 2018, including US$24.5 billion worth of Vietnam’s exports to ASEAN and US$31.8 billion worth of imports from this market.
In addition to the benefits concerning economic growth, ASEAN economic integration has also had a positive impact on Vietnam’s exports, helping it diversify the structure of export products, attract more foreign direct investment (FDI) and increase investment in other ASEAN countries.
ASEAN not only enables Vietnam to be extensively and comprehensively engaged in intrabloc cooperation, but also serves as the nucleus helping the country boost economic, trade and investment cooperation with important partners such as India, the Republic of Korea, Japan, New Zealand, Australia and China, through the signing of free trade agreements (FTAs) between ASEAN and these partners.
SuItable policies needed
According to the Ministry of Industry and Trade (MoIT)’s Multilateral Trade Policy Department, despite favorable conditions that enabled Vietnam to achieve positive results in the ASEAN integration process, the country will also have to cope with challenges.
Specifically, trade protectionism keeps rising across the world, affecting multilateral and regional cooperation. Although ASEAN is a large market with most tariff barriers eliminated, Vietnam still lacks key export products with competitive advantages compared with other ASEAN countries.
Moreover, competition will be increasingly fierce as a result of regional economic integration, because member countries have similar advantages in many areas of production and services. Therefore, in the opinion of experts, Vietnam needs suitable policies to boost ASEAN economic integration, especially in 2020 when it takes over the bloc’s chair. Vietnam should continue considering ASEAN a priority in its international economic integration policy. It is necessary to promote ASEAN’s cooperation with partner countries further, especially with the EU, as Vietnam is a coordinator of ASEAN-EU cooperation, and with member states of the Regional Comprehensive Economic Partnership (RCEP), which represents 50 percent of the global population and 32 percent of the global gross domestic product.
According to the MoIT, Vietnam needs to facilitate stronger participation of the business community and associations in international economic integration. Along with the government’s efforts, businesses should take the initiative in improving their capabilities, enhancing competitiveness and adopting policies to be able to cope with competition, in terms of both quality and quantity, in the economic integration process.
2020 marks an important milestone as Vietnam takes over the rotating chairmanship of Asean and celebrates the
25th anniversary of its Asean membership.
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