Regional Economic Integration and the Impacts on Growth, Poverty and Income Distribution : The Case of Vietnam Regional economic integration and the impacts on growth, poverty and income distribution: the case of Vietnam

Vietnam has recently accelerating the process of integration with the global and world economy in the context of increasing regionalization in East Asia. Vietnam has recently obtained WTO membership, and has participated in the free trade areas under negotiation between ASEAN and China, Korea and Japan. This paper employed a global CGE model to analyze the impacts on Vietnam of the ongoing regional economic integration, focusing on growth, poverty reductions and income distribution. The simulation analysis shows that the regional economic integration generally has positive impacts on Vietnam's economy, and it is both welfare enhancing and income-distribution improving for Vietnam. Household income and consumption increase, and poor and rural household groups benefit more than urban high income groups. A broader economic integration involving large trading partners of Vietnam could significantly increase the output and welfare gains for Vietnam, and most of the potential gain from free trade could be realized through the ongoing economic integration in East Asia.