Through liberalization of trade and investment regimes conducted over the last two decades,
Vietnam has developed profound trade and investment relation with East Asian countries.
Vietnam’s integration with the regional economy has been recently accelerated with its
participation into several regional FTAs. This paper attempts to give an overview of the ongoing
regional integration and conducts a dynamic simulation analysis based on a global CGE model to
quantify the impacts of regional economic integration on Vietnam’s economy. The main conclusion
is that regional economic integration generally has positive impacts on Vietnam’s economic growth
and industrialization, but these positive impacts are in large part brought about by the greater
capital inflows. The realization of the potential benefits of regional integration would depend on
the capability of Vietnam to attract foreign investment through the liberalization of investment
regimes and improvements in infrastructures and human resources.