Vietnam FTA Strategy Shift: Impact on Thailand

Thansettakij•Economy•21d ago

Reader Briefing

Vietnam is transitioning its trade strategy to maximize the concrete use of existing Free Trade Agreements to increase market share and domestic value addition.

•Vietnam currently has 17 effective FTAs covering over 60 countries and economic zones.
•Vietnam's export sector relies heavily on Foreign Direct Investment (FDI), which accounted for 79.9% of exports in the first half of 2026.
•The shift in Vietnam's strategy creates both price competition pressure and supply chain opportunities for Thai entrepreneurs.

Overview

•Vietnam has 17 active FTAs but has not fully utilized tax benefits, with market shares in Canada, the United Kingdom, and Mexico remaining at approximately 1-2%.
•In 2023, the use of certificates of origin under the CPTPP was below 10%, while EVFTA was approximately 34% and UKVFTA was approximately 38%.
•Vietnam aims to increase domestic value addition because only about 20% of exports currently come from domestic businesses, compared to approximately 50% 15 years ago.
•Total merchandise trade for Vietnam in the first 6 months of 2026 was approximately 549,690 million dollars, a 27.1% increase from the previous year.
•Vietnam has proposed that entrepreneurs create an FTA Compliance Dossier to meet modern trade requirements regarding labor, environment, and sustainability.
•New FTAs now emphasize sustainability and traceability, such as the EUDR and CBAM measures implemented by the European Union.
•Vietnam's strategy increases price competition for Thai goods in overlapping markets but offers opportunities for Thai suppliers of industrial parts, packaging, and processed agriculture.
•Thai entrepreneurs are advised to shift from price competition to regulatory compliance and develop traceable data systems across their supply chains.

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Key Entities

Organization

Thai Trade Office in Ho Chi Minh City(สำนักงานส่งเสริมการค้าในต่างประเทศ ณ นครโฮจิมินห์)

The entity that reported on Vietnam's trade strategy shift.

European Union(สหภาพยุโรป)ℹ️

A major market that implemented EUDR and CBAM measures.

Place

Vietnam(เวียดนาม)ℹ️

A country adjusting its FTA strategy to increase market share and domestic value addition.

Canada(แคนาดา)ℹ️

A market where Vietnamese goods have a market share of over 2%.

United Kingdom(สหราชอาณาจักร)ℹ️

A market where Vietnamese goods have a market share of over 1%.

Mexico(เม็กซิโก)ℹ️

A market where Vietnamese goods have a market share of over 1% and benefit from the CPTPP.

United States(สหรัฐฯ)ℹ️

A major market that has raised requirements for supply chain traceability.

China(จีน)ℹ️

A major market that has raised requirements for supply chain traceability.

Thailand(ไทย)ℹ️

A country facing both pressure and opportunity from Vietnam's FTA utilization.

Policy

CPTPPℹ️

A trade agreement with a certificate of origin usage rate of less than 10% in 2023.

EVFTAℹ️

A trade agreement with a certificate of origin usage rate of approximately 34% in 2023.

UKVFTAℹ️

A trade agreement with a certificate of origin usage rate of approximately 38% in 2023.

EUDRℹ️

A European Union measure regarding the traceability of raw materials.

CBAMℹ️

A European Union measure regarding carbon border adjustments.