Economy of Vietnam

Vietnam is one of the fastest growing economies in Asia. It weathered the 2008 global financial crisis quite well with signs of recovery observed in 2009. Vietnam’s membership in the ASEAN Free Trade Area (“AFTA”) in 1995 and entry into force of the US-Vietnam Bilateral Trade Agreement in December 2001 has led to rapid changes in Vietnam’s trade and economic regime. US-Vietnam bilateral trade has grown from about USD220 million in 1994 to USD45.1 billion in 2015, transforming Vietnam into the 13th-largest source for US imports and 37th-largest destination for US exports. Vietnam is the second-largest source of US clothing imports, and a major source for electrical machinery, footwear, and furniture. In recent years, Vietnam has become a leading agricultural exporter and served as an attractive destination for foreign investment in Asia. Manufacturing, information technology and high-tech industries constitute a fast growing part of the economy. Vietnam is also one of the largest oil producers in the region.

Vietnam’s labour force is one of its competitive advantages and accounts for an important part of Vietnam’s future economic growth. Vietnam is famous for its young, hardworking, highly literate and easy-to-train labour force. Vietnam’s labour force or the economically active population, age 15 years and above was 54.61 million people in the 4th quarter of 2015, an increase of 1.7% year-on-year. The labour force of the statutory working age (15-54 for women and 15-59 for men) was 48.19 million people in the 4th quarter of 2015, an increase of 1.7% year-on-year.

Vietnam has membership in several multilateral economic agreements, and has signed a number of free trade agreements, including agreements with the Eurasian Economic Union, the European Union, South Korea. The ASEAN Economic Community (AEC) was established on 31 December 2015, many important commitments had become effective for Vietnam and is likely to create more opportunities to attract foreign direct investment from ASEAN and external partners through improving and increasing the attractiveness of the market.

  • In addition to building the country’s export capacity through private sector development, the Government pursued a strategy to join various international economic and trade agreements. Vietnam became a member of the Association of South East-Asian Nations (“ASEAN”), and concomitantly AFTA in 1995. Under AFTA, Vietnam committed to reduce its tariffs on imports from ASEAN countries to less than 5% by 2006.
  • The second breakthrough was the ratification of the US-Vietnam Bilateral Trade Agreement in 2001. The agreement covered not only trade in goods, but also trade in services, intellectual property rights and other investment-related issues. It committed Vietnam to a number of trade-related reforms, while the United States granted Most Favoured Nation status to Vietnamese imports.
  • The full integration of Vietnam in the multilateral trade system was finalized with the accession to the World Trade Organization (“WTO”) on 11 January 2007, 12 years after application. Vietnam is now party to all the major WTO agreements, including the General Agreement on Trade in Services (“GATS”), the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) and the Agreement on Trade-Related Investment Measures (“TRIMs”).
  • After years of negotiations, on 4 February 2016 Vietnam and 11 other Pacific Rim countries finally signed the Trans-Pacific Partnership (“TPP”) agreement which will take effect upon approval from the legislative bodies of its members. Once ratified by each TPP member country’s congress or parliament, the TPP agreement is expected to become the most significant trade agreement in history. As many as 18,000 tariffs are expected to be eliminated and it will create a free trade area comprising up to 40% of the global economy and 30% of global trade.
Related Chapters

Introduction to Vietnam

Culture and religion in Vietnam

The Government

Judiciary

Legal System

Regulatory Framework

Banking & Finance

Capital Markets

Land & Housing

Labour Law

Taxes

Intellectual Property

Selected Sector Regulations

Dispute Resolution



Contact Us | Legal Notice | Site Map | © 2006 – 2017 Indochine Counsel. All Rights Reserved.