Trade and Investment in the Greater Mekong Subregion-A case of Thailand and Vietnam


To be presented at the 4th ICGBE in Bangkok this weekend:

Trade and Investment in the Greater Mekong Subregion-A case of Thailand and Vietnam


Although Thailand and Vietnam established diplomatic relations in 1976, cooperation between the two countries had been minimal and heavily influenced by the ideological conflict of the Cold War. The distance and hostility in the relationships between Thailand and Vietnam were significantly jeopardized when Vietnam occupied Cambodia, from 1978 to 1989. Needless to say, the volume of trade and investment between Thailand and Vietnam was kept low in a rather long period, particularly between 1954 and 1992. However, as the six governments (Vietnam, China, Lao, Cambodia, Thailand and Myanmar) agreed to set up an economic zone called Greater Mekong Subregion (GMS), the relations between Thailand and Vietnam have also become warmer. Over the past 18 years, the GMS Economic Cooperation Program initiated by the Asian Development Bank has truly improved bilateral performances between the two neighbouring countries. The research paper has discovered that export and import value between Vietnam and Thailand has significantly increased along with the increase of regional interconnectivity of transnational rails and road routes, especially the construction of the East West Economic Corridor. Food, energy, automotive, machinery and agricultural products are dominating the bilateral trade. The paper has also recorded an increasing number of Thai multinational corporations in Vietnam with projects concentrating in industries of agricultural and seafood processing, hotel and hospitality services, construction material production. Empirical evidence collected through the study suggests that future trade and investment prospects between two countries are prosperous and optimistic.  Therefore, incentives in trade and investment policies should be measures pursued by the Vietnamese and Thai governments in order to yield more fruits on economic cooperation of the two countries.

Keywords: Thailand, Vietnam, trade, outward foreign investment

Nancy Huyen Nguyen, University of the Thai Chamber of Commerce, Thailand

John Walsh, Shinawatra University,Thailand



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