Vietnam's Web of Trade Deals

How Vietnam joined the WTO and signed many free trade agreements, including CPTPP and the EU deal, making it one of the world's most open economies.

Vietnam is one of the world’s most trade-dependent economies.

Key milestones

1995: normalised relations with the US and joined ASEAN.
2001: US-Vietnam Bilateral Trade Agreement.
2007: joined the WTO.
2018: joined CPTPP, a trade pact with Japan, Canada, Australia and others.
2020: EU-Vietnam Free Trade Agreement took effect.
RCEP membership with China and others.

Openness

Vietnam’s trade (exports plus imports) has been around 150 to 200 percent of GDP, far higher than India’s.

Benefits

Tariff-free access to many markets.
Attracting foreign investors who want to export.
Reforms required by agreements.

Contrast with India

India has been more cautious, leaving RCEP in 2019 and signing fewer deals, though it has signed new agreements since 2022.

Risks

Heavy dependence on trade exposes Vietnam to global slowdowns and tariffs.

The tariff advantage

A shoe made in Vietnam enters the EU with lower or zero tariffs under the trade agreement, while a similar shoe from a country without a deal pays more.

Thinking trade deals are just paperwork

They give real tariff advantages that attract investment.

Key takeaways

Vietnam joined the WTO in 2007 and signed many trade deals.
CPTPP and the EU deal expanded market access.
Trade is around 150 to 200 percent of GDP.
Openness brings investment but exposure to shocks.