Memorable year for trade can be improved upon in 2025

What were the significant moments in Vietnam’s international economic integration last year?

Director-general of the Multilateral Trade Policy Department under the Ministry of Industry and Trade Luong Hoang Thai

Last year was a difficult one for international economic integration on a global scale. According to the World Trade Organization (WTO) and the International Monetary Fund, global growth is not expected and is not considered a driving force as in previous periods.

However, Vietnam is considered one of the bright spots in the world in taking advantage of the opportunity to participate in newly formed supply chains, thereby creating a new growth driver for the economy.

Regarding integration, in 2024, we focused on two directions: finding new supply chains for development, and creating new room for future growth, which initial achievements. Specifically, Vietnam put the Vietnam-Israel Free Trade Agreement into effect and signed the Vietnam-UAE Free Trade Agreement, regions where Vietnam has not had such relations before.

In terms of potential, markets in the Middle East, South America, and Africa still have a lot of room for development. In addition to finding new room, it is critical that Vietnam continues to maintain and make more effective use of markets that have been exploited in the past, which are traditional and account for 80 per cent of Vietnam’s exports. We will continue to build and maintain relationships, deepening economic and trade relations with traditional partners.

For instance, the G7 countries invited Minister of Industry and Trade Nguyen Hong Dien to present to the WTO how economies can take advantage of the trend of supply chain transformation, of which Vietnam is considered a bright spot.

In addition, Vietnam continues to deepen relations and stabilise its markets with neighbouring countries and blocs, such as China and ASEAN.

What opportunities will free trade deals create for Vietnam in the Middle East and African markets?

Vietnam has exploited traditional markets relatively well, but there are also risks when those markets do not enter a high development stage, but we are too dependent on those markets, so an important task is to exploit and open new markets, especially in places with development potential.

In 2024, there were two new free trade deals in the Middle East region. In which, UAE is the centre of the region and has potential sources of capital, logistics services and is a giant transit port, not only in the Middle East but also to North Africa, even connecting with India and many other places, so this is a gateway that we are determined to open to take advantage of the connection potential between the two economies.

Meanwhile, Israel is considered one of the success stories in terms of startups and innovation, where there are many sources of technology and skills from which Vietnam can learn, so although this is a relatively small-scale export market, it is also a good market if it can be linked to this economy.

In general, for the remaining 20 per cent of exports, the market is relatively fragmented, if small-scale enterprises themselves seek these markets, it will be very difficult, therefore, the general policy of the government and the Ministry of Industry and Trade is to open up the market and create connections, thereby creating more convenience and reducing costs for enterprises.

What solutions are needed to improve the competitiveness of the economy alongside boosting new development drivers?

Experts predict 2025 as a very difficult year for international economic integration, but there is also a great opportunity because after a lengthy time, the world is entering a period of qualitative change in the supply chain, so countries that integrate later like Vietnam will have the ability to tackle new stages. With those changes, we must be calm and identify new trends, but more importantly, find what can be positioned in that change to achieve better results.

Global trade growth has been lower than global GDP growth in recent times, and there are considerable trends that can strongly change the way countries trade with each other. The first trend is that some major economies are more inward-looking, some even embracing trade protectionism, with trade wars happening in some regions.

The second trend is that even though economies continue to open up, there are new measures to implement global changes, such as green transformation, accompanied by a series of stricter management measures on the supply chain to ensure that consumer demand is met, which is sometimes seen by businesses as a barrier creating new costs that businesses must comply with.

Vietnam is one of the countries with the highest economic openness, being heavily dependent on international trade and investment. The world has been managing supply chains tightly, so the rules that we have been pursuing up to now through WTO rules seem to be no longer adequate, which is a huge challenge for Vietnam.

However, Vietnam is also one of the countries benefitting the most from global integration, especially with the world supply chain changing of late. Accordingly, we want to seize such opportunities and to skip certain development stages, grasping trends such as digital transformation and green transformation, and to reach a higher level.