Vietnam - Thailand: Elevating Bilateral Cooperation to a New Level

Amid the increasingly interconnected Southeast Asian economy and the reshaping of global supply chains, economic cooperation between Vietnam and Thailand has emerged as a strategic, efficient, and complementary partnership. Both economies share favorable geographical locations, highly complementary production structures, and common goals of sustainable development, digital transformation, and deep integration into international markets.

Current Status of Vietnam - Thailand Economic Cooperation

1. Bilateral Trade

Thailand is currently Vietnam's largest trading partner within ASEAN. In 2024, bilateral trade volume between the two countries reached over USD 20.2 billion, marking a 6.3% increase compared to 2023. In the first four months of 2025, this figure stood at approximately USD 6.88 billion, up 11.2% year-on-year.

Vietnam's main exports to Thailand include mobile phones, electronic components, seafood, and agricultural products. In return, Vietnam imports petroleum products, automobiles, chemicals, and electronic components from Thailand.

2. Foreign Direct Investment

As of the end of Q1 2025, Thailand had more than 670 investment projects in Vietnam, with a total registered capital of nearly USD 14 billion, ranking ninth among countries and territories investing in Vietnam. Thai investment is shifting from traditional sectors such as retail and food toward processing industries, renewable energy, and logistics. Major Thai corporations such as CP Group, SCG, and BJC (owner of the Big C/GO! retail chain) have invested and operated effectively in Vietnam.

3. Other Areas of Cooperation

Beyond trade and investment, Vietnam and Thailand also cooperate in tourism, logistics, agriculture, and renewable energy. The two countries are working to connect regional supply chains in the Mekong area and enhance cooperation in processing industries.

New Strategic Cooperation Documents

During the 4th Vietnam–Thailand Joint Cabinet Meeting held on May 16, 2025, in Hanoi, both sides exchanged and signed eight important cooperation documents, including:

• A Memorandum of Understanding between Vietnam’s Ministry of Industry and Trade and Thailand’s Ministry of Commerce on cooperation in economic and trade fields.

• A financial support agreement marking over a decade of implementing the Letter of Agreement on law enforcement and drug control, between Thailand’s Office of Narcotics Control Board and Vietnam’s Drug Crime Investigation Police Department.

• A cooperation program for 2026–2028 between Vietnam’s Department of Domestic Market Management, Foreign Market Development Department (Ministry of Industry and Trade), and Thailand’s Central Group.

• A Memorandum of Understanding between Hung Yen Provincial People's Committee and WHA Group (Thailand) on the development of Phu Cu Industrial Park.

• A strategic investment cooperation MOU between Phu Tho Provincial People’s Committee and Amata Vietnam Group.

• A decision approving investment policy for the Giang Quang Thinh Industrial Park infrastructure project in Thanh Hoa Province.

• A comprehensive cooperation agreement between BIDV (Vietnam) and Thailand Exim Bank.

• A Memorandum of Understanding between Khon Kaen University (Thailand) and FPT University (Vietnam) on human resource training in the semiconductor sector.

Challenges and Untapped Potential

1. Challenges

• Regional Competition: Both Vietnam and Thailand have strengths in exporting agricultural products, seafood, electronic components, and consumer goods. However, these similarities mean the two countries are both partners and competitors in regional and global market expansion. Avoiding conflicts of interest and focusing on value chain-based cooperation will be key to a successful bilateral strategy.

• Technical and Administrative Barriers: Differences in technical standards, food safety regulations, animal and plant quarantine procedures, and customs clearance continue to hinder import-export activities. Particularly for small and medium enterprises (SMEs), complex procedures and high logistics costs pose significant barriers to market access.

2. Potential

• Promoting E-Commerce: With young populations, high internet usage rates, and increasing digital consumption trends, both Vietnam and Thailand have strong potential for e-commerce development. Building platforms for direct business-to-business connections can help expand market access, reduce intermediaries, and improve transaction transparency.

• Renewable Energy Cooperation: Both countries have identified green energy development as a medium- and long-term strategic goal. Thailand has strengths in solar and biomass energy technologies and investment capital, while Vietnam possesses abundant natural resources. Collaboration in research, technology transfer, and project investment will bring long-term benefits and align with Net Zero commitments.

• Developing Green Supply Chains: As global markets increasingly prioritize ESG (Environmental, Social, and Governance) standards, Vietnam and Thailand can work together to establish traceable, low-carbon, and digitally managed regional supply chains. This will create a new competitive advantage for regional businesses seeking access to demanding markets.

Future Cooperation Directions

1. Target to Elevate Bilateral Trade Volume

With economic ties between Vietnam and Thailand strengthening, both sides have agreed to target USD 25 billion in bilateral trade by 2030. This clear goal reflects a strong high-level commitment to enhancing substantial, balanced, and sustainable economic cooperation.

To achieve this goal, the two countries will continue to promote bilateral cooperation mechanisms such as the Joint Commission on Bilateral Cooperation, the Joint Trade Committee, and multilateral frameworks like ASEAN, RCEP, and CPTPP. Additionally, efforts will focus on facilitating business access to markets, improving the investment environment, removing technical barriers, and enhancing market information sharing.

2. Strategic Cooperation Expansion

During the official visit to Vietnam by Thai Prime Minister Srettha Thavisin in April 2024, both sides signed a series of important cooperation agreements, affirming their commitment to upgrading bilateral relations to an enhanced strategic partnership. This direction will form the foundation for expanding cooperation in key areas:

• Economy – Trade – Investment: Priority will be given to developing key industries, transitioning to a green economy model, fostering innovation, and accelerating digital transformation. Cooperation will also focus on supporting industries, logistics, infrastructure, and the circular economy.

• Economic Security and Supply Chains: Both countries will continue working together to build sustainable regional supply chains, especially in high-tech agriculture, food processing, electronics, and consumer goods. Strengthening infrastructure connectivity and reducing logistics costs will enhance business competitiveness.

• Innovation and High Technology: Encourage collaboration between major corporations and tech startups from both countries to develop innovative solutions in digital finance, artificial intelligence, clean energy, and Industry 4.0. Public–private partnership (PPP) mechanisms need to be promoted to attract private investment into these priority sectors.

• Developing High-Quality Human Resources: Jointly organize training programs, scholarship exchanges, student and expert exchanges to develop digital and global management skills for the future workforce. This is a strategic factor in ensuring investment readiness and improving labor productivity.

3. Prospects for Cooperation Towards Sustainable and Inclusive Development

Vietnam–Thailand relations are heading toward a new cooperation model that not only focuses on trade and investment growth but also aligns with sustainable development goals:

• Climate Change Cooperation: Both countries aim to achieve net-zero emissions by mid-century. Sharing experience, green technology, and finance will help implement projects on renewable energy, smart agriculture, and sustainable urban development more effectively.

• Promoting Roles in the ASEAN Regional Supply Chain: As two major economies in ASEAN, Vietnam and Thailand can play a leading role in developing an integrated manufacturing and logistics ecosystem. By effectively leveraging next-generation free trade agreements, both countries can enhance the region’s position in the global value chain.

Conclusion

The economic cooperation between Vietnam and Thailand has achieved remarkable progress and holds great potential for further development. With strong commitment and joint efforts from both sides, this partnership will continue to be strengthened, contributing to the sustainable development and prosperity of both nations and the ASEAN region as a whole.