ASEAN membership fuels Vietnam’s trade with regional markets

Vietnam’s participation in ASEAN 25 years ago has helped the country enjoy strong growth in trade with other member nations.

ASEAN membership fuels Vietnam’s trade with regional markets
Trade between Vietnam and ASEAN during 2015-2019 (million USD)

Since Vietnam became an official member of ASEAN on July 28, 1995, bilateral trade has increased sharply, making ASEAN the fourth largest importer of Vietnam at present, following the US, the EU and China.

In 2019, the trade value reached 57.3 billion USD, up 1.1 percent from a year earlier. That consisted of 25.2 billion USD of Vietnam’s exports, rising 1.5 percent and accounting for 9.6 percent of the country’s total overseas shipments, and 32.1 billion USD of imports from ASEAN, up 0.9 percent year-on-year and making up 12.7 percent of total imports.

The trade deficit of 6.85 billion USD last year fell 1.3 percent from 2018.

Among ASEAN markets, Vietnam mainly ships products to Thailand, Malaysia, Singapore, the Philippines, and Indonesia.

Its key export items include steel; mobile phones and components; computers, electronic products and components; machinery, equipment, tools and spare parts, and textile-garment products.

Director of the Foreign Ministry’s ASEAN Department Vu Ho said Vietnam’s integration into ASEAN has been carried out effectively, contributing to economic growth over the last more than 25 years.

 

In 1995, Vietnam joined the ASEAN Free Trade Area (AFTA) and negotiated to sign the Common Effective Preferential Tariff Scheme for the AFTA. Without the AFTA, Vietnam might not have been able to ink the free trade agreement with the EU and the bilateral trade agreement with the US.

Taking part in ASEAN was a preparatory step for Vietnam to participating in others on a larger scale, Ho noted.

According to the Ministry of Industry and Trade (MoIT), ASEAN is a market not only in close proximity to Vietnam but also sharing similarities in culture and consumer habits. It is home to 636 million people and has combined GDP of 2.76 trillion USD.

Therefore, there remains huge room for boosting the export of Vietnamese goods to ASEAN countries, the ministry said.

Besides, the country’s main imports from the bloc include computers, electronic products and components; petrol; machinery, equipment, tools and spare parts; raw plastics; base metal; and chemicals.

While many domestic production industries have yet to ensure sufficient supplies of input material, the ASEAN market has created chances for Vietnamese firms to seek abundant material supplies with reasonable prices and access capital sources and high technologies, thus helping them reduce production cost and improve product quality.

Nguyen Cam Trang, Deputy Director of the MoIT’s Export-Import Department, said amid current difficulties in exports to the US and the EU, stepping up the capitalisation on the ASEAN market is a common trend shared by many businesses, and this is also a good way to diversify export destinations and avoid dependence on certain markets./.VNA

 
 

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