Vietnam emerges as key ASEAN growth driver 30 years after integration

Three decades after joining the Association of Southeast Asian Nations (ASEAN), Vietnam has transformed from an economy opening up to the world into one of the region’s key growth drivers. While the bloc once served as Vietnam’s primary gateway to the global economy, the country is now instrumental in generating new momentum for ASEAN through advancements in trade, investment, logistics, digital transformation, and green growth.

A History of Deepening Integration

Vietnam’s accession to ASEAN in 1995, followed by its entry into the ASEAN Free Trade Area (AFTA) a year later, marked the beginning of a strategic pursuit of deep regional integration to fuel reform and development. This commitment was further solidified through subsequent pacts, including the ASEAN Trade in Goods Agreement (ATIGA), various ASEAN-plus-one free trade deals, and the Regional Comprehensive Economic Partnership (RCEP), which have collectively created a vast economic space with ASEAN at its core.

Dr. Lê Quốc Phương, former Deputy Director of the Industry and Trade Information Centre under the Ministry of Industry and Trade, said that this extensive economic integration has been a primary driver of Vietnam’s commercial expansion. He highlighted that participation in the bloc's free trade agreements has led to breakthrough growth, with bilateral trade surging from just over US$3 billion in the early years of membership to an estimated $91 billion in 2025. This has established the bloc as one of Vietnam’s largest trading partners.

From Beneficiary to Supply Chain Contributor

Beyond trade volumes, Vietnam has progressively shifted from being a beneficiary of regional integration to a key contributor to ASEAN’s future development. The country has established itself as an important link in regional supply chains spanning electronics, machinery, textiles, agriculture, and food products. Vietnamese goods are not only prevalent in ASEAN markets but are also increasingly integrated into the region's intra-bloc production networks.

Vũ Bá Phú, director of the ministry's Vietnam Trade Promotion Agency, stated that ASEAN economies are becoming more complementary, which creates "favourable conditions for Vietnamese firms to engage more deeply in regional supply chains." He identified expanding opportunities in higher-value sectors such as manufacturing, processing, supporting industries, electronics, and automotive. This trend is evident in trade with Thailand, Vietnam’s largest ASEAN partner, where exports of Vietnamese computers, electronic products, and components have shown robust growth, signalling closer production linkages and an enhanced position for Vietnam in regional value chains.

Logistics as a Strategic Growth Pillar

As the advantages of low labour costs become less decisive, future growth is increasingly expected to derive from supply chain connectivity, innovation, and high-value services, with logistics emerging as a strategic pillar.

Nguyễn Anh Sơn, director of the Agency of Foreign Trade, said there remains "substantial room for logistics cooperation between Việt Nam and other ASEAN members as global supply chains undergo strong restructuring." He pointed to Vietnam’s geopolitical location between ASEAN and China, combined with its expanding seaport network and transport infrastructure, as a complement to Singapore’s strengths in transshipment and digital logistics and Thailand’s expertise in multimodal transport.

The combination of these advantages, he noted, could form a more efficient regional logistics network. Sơn added that cooperation is expected to expand beyond traditional transport and warehousing to include cross-border e-commerce logistics, cold-chain services, logistics for the semiconductor and energy industries, and the development of regional distribution centres.

The Digital and Green Frontiers

Digital transformation is also becoming a new engine for growth. ASEAN is actively working towards a smart logistics ecosystem built on digital platforms that link customs, transportation, ports, warehouses, and product-traceability systems. Vietnam is well-positioned to participate deeply in this ecosystem, supported by its rapidly growing e-commerce sector and its important role in Asian supply chains.

Concurrently, green growth and sustainable development are emerging as another critical area for cooperation. As global markets impose stricter requirements on carbon emissions, traceability, and ESG standards, ASEAN is increasingly competing on the quality of its growth rather than on costs alone. According to Sơn, ASEAN countries should coordinate to develop common standards for green logistics, transport, and warehousing, as well as emissions measurement, to strengthen the region’s export competitiveness. Opportunities are also expanding in renewable energy, carbon credits, the circular economy, green industries, and sustainable supply chains.

Future Cooperation and Regional Outlook

At the third ASEAN Future Forum held recently, Deputy Minister of Industry and Trade Nguyễn Hoàng Long highlighted the need for the bloc to adopt a more comprehensive approach to energy security. This approach should ensure not only supply sources but also resilience to crises while maintaining reasonable costs and supporting a sustainable energy transition. He suggested that future regional energy cooperation should focus on "guaranteeing supply chains, improving energy efficiency, promoting just energy transition, and effectively utilising new technologies like energy storage, hydrogen and biofuel technologies."

Another promising area is the Halal economy, where Vietnam’s strengths in agriculture, food production, and tourism, along with its extensive network of free trade agreements, position it to integrate more deeply into regional Halal supply chains.

Experts observe that ASEAN is entering a new stage of development where competitive advantage is determined less by labour costs or market size and more by the ability to strengthen supply chain connectivity, harness technology, advance green development, and adapt to global uncertainties. In this evolving context, Vietnam is no longer merely a beneficiary of regional integration but is emerging as one of the key drivers of growth in the region.