Vietnam’s Perspectives on Regional Economic Integration

This paper revisits Vietnamese perspectives on regional economic integration. Proactive economic integration has been an important pillar of Vietnam’s economic reforms. The country’s current economic integration process involves preparation for the ASEAN Economic Community (AEC) and the negotiation of ambitious free trade agreements such as the Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP) agreements. As the umbrella organization for Vietnam’s economic integration, ASEAN continues to forge the country’s trade and investment linkages with the region. The AEC is making progress, but certain challenges remain with the overall management of regional cooperation, improvements to ASEAN centrality and connectivity, and issues related to contemporary regional and non-traditional security. RCEP and TPP represent recent ambitious efforts to promote economic integration. Notwithstanding their potential benefits, RCEP and TPP may produce different outcomes, including trade diversion, for major economies. These two trade agreements have various similarities and differences, but they exhibit potential consistency with the concept of a Free Trade Area of the Asia Pacific. Vietnam’s economy may benefit immensely from ongoing integration efforts. Still, such benefits are conditional on relevant and timely domestic reforms, particularly of economic institutions, state-owned enterprises and public investment. The harmonization of commitments under various economic integration tracks and improvements to market confidence is also critical.