Promoting Regional Trade Integration: From Breadth to Depth

However, these agreements primarily focus on tariff reductions, while areas such as non-tariff barriers (NTBs), service liberalization, and technical standards remain underdeveloped. According to the World Bank, Vietnam’s current integration strategy leans more towards "breadth" than "depth." For example, Vietnam’s level of commitment to trade in services remains lower than that of countries like Thailand and Malaysia, preventing full exploitation of the potential benefits of signed trade agreements.

Additionally, while Vietnam has succeeded in increasing export turnover, the domestic value-added content of its exports remains low. This raises critical questions about how Vietnam can not only participate in but also lead global value chains through trade agreements.

Deep integration goes beyond signing FTAs and involves implementing commitments to minimize trade and investment barriers. To achieve this, Vietnam needs to focus on reducing non-tariff barriers and promoting service liberalization.

One of the major opportunities lies in the service sector. Currently, services account for only about 12% of Vietnam’s total export value, far below the average of developed countries. Liberalizing trade in services could not only boost productivity but also unlock significant opportunities in sectors such as information technology, finance, and logistics. Particularly, the rise of digital trade and technology platforms is creating entirely new fields that Vietnam can capitalize on.

Furthermore, aligning regulations and standards with international markets will help Vietnamese goods meet stricter requirements in developed markets like the EU and the U.S. This will not only increase export value but also enhance Vietnam’s reputation as a reliable manufacturing hub.

Deeper integration also enables Vietnam to establish strategic partnerships. Agreements like the CPTPP and EVFTA offer not just economic benefits but also opportunities for Vietnam to assert its position in international forums, strengthening its influence regionally and globally.

Despite significant opportunities, promoting deeper integration comes with challenges.

First, the readiness of domestic businesses remains limited. Many small and medium-sized enterprises (SMEs) lack the capacity to meet international standards or participate in global supply chains. A lack of understanding of FTA commitments and the ability to utilize their benefits effectively remains a major weakness. According to a survey, only about 40% of Vietnamese businesses know how to take advantage of tariff preferences under signed FTAs.

Second, administrative and institutional barriers also pose obstacles. Vietnam’s legal framework requires significant reforms to align with international commitments, particularly in areas such as intellectual property rights protection, trade dispute resolution, and cross-border data management.

Finally, Vietnam must invest more in infrastructure, including digital and logistics infrastructure. Without modern transportation and technology systems, connecting to international markets and fostering deeper integration will remain challenging.

Vietnam stands at a turning point in its journey of international economic integration. From a country focused primarily on signing FTAs, Vietnam now needs to transition to prioritizing the quality and depth of trade commitments. This requires coordinated efforts from the government, businesses, and international organizations.

Deeper integration is not only an opportunity to enhance export value but also a way for Vietnam to elevate its position regionally and globally. However, achieving this goal requires Vietnam to address challenges, from institutional reforms to improving business capacity. Only by effectively leveraging the potential of FTAs can Vietnam establish itself as a leading trade and manufacturing hub by 2045.