Advantages and export trend of Vietnam in trade relations with ASEAN

Abstract

This study identifies commodities that Vietnam has comparative advantage based on RCA index, growth determinants and export trend of Vietnam into the ASEAN market via growth-component analysis and Spearman’s rank correlation test. Using data of UNComtrade, we find that Vietnam has 91 commodities with comparative advantage in 2000 – 2015. Increased export of Vietnam into ASEAN is thanks to a strong demand in the ASEAN market, suitable industry structure and especially comparative advantage which can be seen clearly in 2007 – 2015. Vietnam has the most favorable conditions in trading relations with Singapore, Brunei, and Malaysia and less favorable conditions with the remaining ASEAN countries, including Indonesia and Cambodia that are direct competitors of Vietnam. From the results, the paper provides policy suggestions to expand the Vietnam’s comparative advantage in trading with ASEAN.