Abstract
Vietnam is increasingly participating in the global economic integration as part of its strategy in transition into a free market economy, and has recently concluded the negotiations with the European Union (EU) on the EU-Vietnam Free Trade Agreement (EVFTA). The EVFTA is the first Vietnam concluded FTA that specifies obligations with particular emphasis on trade defence instruments. This article analyses the international, as well as Vietnamese legal framework in light of the trade commitments under the EVFTA trade defence instruments. The article examines the situation in Vietnam with regard to compliance both in law and practice with commitments in the aspects of anti-dumping, subsidies and safeguards. This article further identifies the main gaps, including enforcement issues and provides relevant recommendations on the necessary legal steps and timeframes (new acts, amendments or repeal of existing legal texts) to promote the consistency of the Vietnamese legal system with the EVFTA obligations. The analysis also assesses the impact on the Vietnamese legal system of specific parts of the EVFTA. In totality, the EVFTA rules, reviewed in this article, do not contain highly demanding norms which would be expected to affect a great number of domestic rules. Rather, the EVFTA contains soft commitments with limited implementation issues which suggest and support reforms in Vietnam with regards to trade defence, and indirectly, state-owned enterprises and competition law.
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Notes
- 1.
This article analyses the EVFTA trade defence chapter and uses the full text without amendment issued following Legal Scrubbing in Preparation of 3rd Round, EU comments at 25 October 2016 which is used in the preparation of the report. Currently, EU is negotiating FTAs with several partners in Asia and America. On 8 December 2017, the Parties communicated the conclusion of the EU-Japan Economic Partnership Agreement (EPA).
- 2.
Chapter 3, Article 5 EVFTA (Exclusion from Dispute Settlement) reads: “The provisions of this Section shall not be subject to Chapter 15 (Dispute Settlement).”
- 3.
Vietnam is participating in the negotiations of the Regional Comprehensive Economic Partnership that is expected to have a chapter on trade remedies and chapter on competition. See Joint Leaders’ Statement on the Negotiations for the Regional Comprehensive Economic Partnership (RCEP), RCEP: A vehicle for economic integration and inclusive development, http://asean.org/storage/2017/11/RCEP-Summit_Leaders-Joint-Statement-FINAL1.pdf (last accessed 30 April 2018).
- 4.
Vietnam also signed the Trans Pacific Partnership (TPP) in February 2016. The treaty, which did not yet enter into force because the United States withdrew, contains a chapter on trade remedies, a chapter on competition and a chapter on state-owned enterprises and reflect a similar, yet competing regulatory approach to the one used in new FTAs negotiated by the EU. The TPP-name has changed to Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the other remaining 11 members (including Vietnam) will incorporate a great part of the TPP provisions. See New Zealand Foreign Affairs & Trade, CPTPP vs TPP, https://www.mfat.govt.nz/en/trade/free-trade-agreements/agreements-under-negotiation/cptpp-2/tpp-and-cptpp-the-differences-explained/#remaining (last accessed 30 April 2018).
- 5.
Nguyen Huong, EVFTA ratification expected early next year, Vietnam Economic News, 30 July 2018, http://ven.vn/evfta-ratification-expected-early-next-year-34025.html (accessed 2 August 2018).
- 6.
See New Zealand Foreign Affairs & Trade, CPTPP vs TPP, https://www.mfat.govt.nz/en/trade/free-trade-agreements/agreements-under-negotiation/cptpp-2/tpp-and-cptpp-the-differences-explained/#remaining (last accessed 30 April 2018).
- 7.
EVFTA Chapter 15, Trade and Sustainable development.
- 8.
Borlini and Dordi (2016), p. 575.
- 9.
WTO Agreement on Agriculture, Article 9.4. During the implementation period, developing country Members shall not be required to undertake commitments in respect of the export subsidies listed in subparagraphs (d) and (e) of paragraph 1 above, provided that these are not applied in a manner that would circumvent reduction commitments.
- 10.
A small portion of the subsidies issued prior to the WTO accession were terminated within 5 years after Viet Nam’s accession to the WTO, see World Trade Organization, Report of the Working Party on the Accession of Viet Nam, Draft Notification Pursuant to Article XVI:1 of the GATT 1994 and Article 25 of the Agreement on Subsidies and Countervailing Measures, WT/ACC/VNM/42, 27 October 2006.
- 11.
Prime Minister Decision establishing the Vietnam Development Bank, No. 108/2006/QD-TTg, 19 May 2006.
- 12.
The organisation and operations of the VDB have been updated on 3 September 2015 following Prime Decision on approval of the Charter on Organization and Operation of the Vietnam Development Bank, No. 1515/QD-TTg, 3 September 2015.
- 13.
State Bank of Vietnam Circular detailing the implementation of interest rate support for individuals and organizations acquiring medium and long term loans from Vietnam Development Bank, No. 18/2010/TT-NHNN, 16 September 2010, Article 3.
- 14.
State Bank of Vietnam Circular Providing on Bank Guarantee, No. 28/2012/TT-NHNN, 3 October 2012; see also WTO Trade Policy Review Body, Report by the Secretariat on Viet Nam, WT/TPR/S/287, 13 August 2013, p. 63.
- 15.
Prime Minister Decision approving the National Energy Development Strategy of Vietnam for the period up to 2020 with outlook to 2050, No. 1855/QD-Ttg, 27 December 2007.
- 16.
See Asian Development Bank (2015) pp. 101–102.
- 17.
Prime Minister Decision on the Approval of the Revised National Power Development Master Plan for the 2011–2020 Period with the Vision to 2030, No. 428/QD-TTg, 18 March 2016.
- 18.
For the period from 2016 to 2020, around US$40 billion are required, of which 75% will be used for power generation development and 25% for power network development. The amount of US$108 billion is required for period from 2021 to 2030 with a similar distribution for power generation and network development respectively. See Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, Vietnam Power Development Plan for the period 2011–2020, Highlights of the PDP 7 revised, http://gizenergy.org.vn/media/app/media/legal%20documents/GIZ_PDP%207%20rev_Mar%202016_Highlights_IS.pdf (last accessed 30 April 2018).
- 19.
See Prime Minister Decision approving the National Energy Development Strategy of Vietnam for the period up to 2020 with outlook to 2050, No. 1855/QD-Ttg, 27 December 2007 and Prime Minister Decision on the Approval of the Revised National Power Development Master Plan for the 2011–2020 Period with the Vision to 2030, No. 428/QD-TTg, 18 March 2016.
- 20.
Prime Minister Decision on the Approval of the Revised National Power Development Master Plan for the 2011–2020 Period with the Vision to 2030, No. 428/QDTTg, 18 March 2016.
- 21.
In 2012, fisheries contributed about 4.2% to GDP (down from 10–11% in 1990s but up from 3.7% in 2009) and in 2011, it accounted for 3.2% of total employment. See WTO Trade Policy Review Body, Report by the Secretariat on Vietnam, WT/TPR/S/287, 13 August 2013, p. 103.
- 22.
Government Decision providing temporary support to a number of sectors, including fuel subsidies for fishing vessels, No. 289/TQ-TTg, March 2008.
- 23.
Prime Minister Decision Approving the Scheme on organization of communication in service of prevention and combat of natural disasters at sea, No. 137/2007/QD-TTg, 21 August 2007.
- 24.
See WTO Trade Policy Review Body, Report by the Secretariat on Vietnam, WT/TPR/S/287, 13 August 2013.
- 25.
See generally LE Thi Thuy Van and Sarah Y. Tong, Vietnam and Anti-Dumping: Regulations, Applications and Responses, (2009) EAI Working Paper N 146.
- 26.
The structure, function, task and authority of VCAD are stipulated in the Government Decree on functions, duties, powers and organizational structure of Vietnam Competition Administration Department, No. 06/2006/ND-CP, 9 January 2006 and the Trade Ministry Decision regarding the establishment and regulation of functions, tasks and powers of companies under the management of competition, No. 27/2006/QD-BTM, 28 August 2006.
- 27.
See Borlini and Dordi (2016), p. 583 when discussing injury to trade and impairment to competition.
- 28.
See, for instance, Panel Report, United States – Anti-dumping Measures on Certain Shrimp from Viet Nam, WT/DS404/R, adopted 1 February 2010.
- 29.
Tuan D, New legislation strengthens Vietnam’s trade remedy rules: finance ministry, 11 October 2016 https://e.vnexpress.net/news/business/new-legislation-strengthens-vietnam-s-trade-remedy-rules-finance-ministry-3481478.html (last accessed 30 April 2018).
- 30.
Data available on European Commission, Actions against exports form the EU, Viet Nam, All products All instruments Any year, http://trade.ec.europa.eu/actions-against-eu-exporters/cases/index.cfm?scoun=VN&sprod=all&sinst=all&sinit=all&scinv=all&sstat=all&smeas=all&search=ok&c_order=stat&c_order_dir=Up (last accessed 30 April 2018).
- 31.
The Law on Export and Import Duties, No. 107/2016/QH13, 6 April 2016, repeals the old legislation, the Law on Export and Import Duties, No. 45/2005/QH11, 14 June 2005.
- 32.
Chapter 3, Article 1 EVFTA (General Provisions) reads: “(1) The Parties affirm their rights and obligations under Article VI of GATT 1994, the Anti-Dumping Agreement, and the SCM Agreement. The Parties, recognising that anti-dumping and countervailing measures can be abused to obstruct trade, agree that: (2) trade remedies should be used in full compliance with the relevant WTO requirements and should be based on a fair and transparent system; and when a Party considers imposing such measures, careful consideration should be given to the interests of the other Party. For the purposes of this Section, origin shall be determined in accordance with Article 1 of the Agreement on Rules of Origin.”
- 33.
Chapter 3, Article 2 EVFTA (Transparency) reads: “[w]ithout prejudice to Article 6.5 of the Anti-Dumping Agreement and Article 12.4 of the SCM Agreement, the Parties shall ensure, immediately after any imposition of provisional measures and in any case before final determination is made, full and meaningful disclosure to interested parties of all essential facts and considerations which form the basis for the decision to apply measures. Disclosures shall be made in writing and allow interested parties sufficient time to make their comments. Provided it does not unnecessarily delay the conduct of the investigation, interested parties shall be granted the possibility to be heard in order to express their views during trade remedies investigations.”
- 34.
Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, Article 6.5: “Any information which is by nature confidential (for example, because its disclosure would be of significant competitive advantage to a competitor or because its disclosure would have a significantly adverse effect upon a person supplying the information or upon a person from whom that person acquired the information), or which is provided on a confidential basis by parties to an investigation shall, upon good cause shown, be treated as such by the authorities. Such information shall not be disclosed without specific permission of the party submitting it.”
- 35.
Agreement on Subsidies and Countervailing Measures, Article 12.4: “Any information which is by nature confidential (for example, because its disclosure would be of significant competitive advantage to a competitor or because its disclosure would have a significantly adverse effect upon a person supplying the information or upon a person from whom the supplier acquired the information), or which is provided on a confidential basis by parties to an investigation shall, upon good cause shown, be treated as such by the authorities. Such information shall not be disclosed without specific permission of the party submitting it.”
- 36.
Chapter 3, Article 2 EVFTA (Transparency).
- 37.
See also the combined application of National Assembly Standing Committee Ordinance on Antidumping, No. 08/2004/L-CTN, 12 May 2004 and Government Decree Setting Forth Detailed Regulations and Guidance for Implementing a Number of Provision of the Ordinance on Antidumping of Imports into Vietnam, No. 90/2005/ND-CP, 11 July 2005.
- 38.
See also National Assembly Standing Committee Ordinance on Anti-Subsidy for Imports into Vietnam, No. 22/2004/PL-UBTVQH11, 20 August 2004.
- 39.
See also the combined application of Government Decree detailing the implementation of the Ordinance on Safeguards in the Import of Foreign Goods into Vietnam, No. 150/2003/Nd-Cp, 8 December 2003 and Order on the Promulgation of the Ordinance on Safeguards in the Import of Foreign Goods into Vietnam, No. 12/2002/L-Ctn, 25 May 2002.
- 40.
Chapter 3, Article 3.2.2 EVFTA: “Provided it does not unnecessarily delay the conduct of the investigation, interested parties shall be granted the possibility to be heard in order to express their views during trade remedies investigations.”
- 41.
Chapter 3, Article 3.3 EVFTA: “… In determining the public interest, the Party shall take into account the situation of the domestic industry, importers and their representative associations, representative users and representative consumer organisations, based on the relevant information provided to the investigating authorities.”
- 42.
Wening (2005).
- 43.
Chapter 3, Article 4 EVFTA (Lesser Duty Rule): “An anti-dumping or countervailing duty imposed by a Party shall not exceed the margin of dumping or countervailable subsidy, and the Party shall endeavour to ensure that the amount of this duty is less than that margin if such lesser duty would be adequate to remove the injury to the domestic industry.”
- 44.
Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, Article 9.1.
- 45.
European Commission, EU modernises its trade defence instruments, 23 January 2018, http://europa.eu/rapid/press-release_MEMO-18-396_en.htm (last accessed 30 April 2018).
- 46.
See Appellate Body Report, European Communities – Definitive Anti-Dumping Measures on Certain Iron or Steel Fasteners from China, WT/DS397/AB/R, adopted 15 July 2011, WT/DS397/AB/R, para. 336: “Article 9.2 states that anti-dumping duties “shall be collected in the appropriate amounts in each case” and that “authorities shall name the supplier or suppliers of the product concerned.” It is thus clear from the wording of this provision, which uses the auxiliary verb “shall”, that the collection in appropriate amounts of anti-dumping duties and the naming of the supplier are of a mandatory nature. The mandatory nature of the first and second sentences of Article 9.2 can be contrasted with the preference expressed in the second sentence of Article 9.1 for duties lesser than the margin of dumping, if lesser duties are adequate to remove the injury to the domestic industry. To express such a preference, Article 9.1 uses the expression “it is desirable”.
- 47.
Chapter 3, Article 6 EVFTA (General Provisions) reads: “(1) The Parties affirm their rights and obligations under Article XIX of GATT 1994, the Safeguards Agreement and Article 5 of the Agreement on Agriculture. (2) A Party shall not apply with respect to the same good at the same time: (a) a bilateral safeguard measure under Section C (Bilateral Safeguard Clause) of this Chapter; and (b) a measure under Article XIX of GATT 1994 and the Safeguards Agreement. (3) For the purposes of this Section, origin shall be determined in accordance with Article 1 of the Agreement on Rules of Origin.”
- 48.
Chapter 3, Article 7 EVFTA (Transparency) reads: “Notwithstanding Article 3.6 (General Provisions), the Party initiating a global safeguard investigation or intending to impose global safeguard measures shall provide, at the request of the other Party and provided that it has a substantial interest, immediately ad hoc written notification of all pertinent information leading to the initiation of a global safeguard investigation and, as the case may be, the proposal to impose the global safeguard measures, including on the provisional findings, where relevant. This is without prejudice to Article 3.2 of the Safeguards Agreement. When imposing global safeguard measures, the Parties shall endeavour to impose them in a way that least affects bilateral trade. For the purposes of paragraph 2, if a Party considers that the legal requirements for the imposition of definitive safeguard measures are met, it shall notify the other Party and give the possibility to hold bilateral consultations. If no satisfactory solution has been reached within 30 days of the notification, the Party may adopt the definitive global safeguard measures. The possibility to hold consultations should be offered to the other Party in order to exchange views on the information referred to in paragraph 1.”
- 49.
See the combined application of Government Decree detailing the Implementation of the Ordinance on Safeguards in the Import of Foreign Goods into Vietnam, No. 150/2003/Nd-Cp, 8 December 2003 and Order on the Promulgation of the Ordinance on Safeguards in the Import of Foreign Goods into Vietnam, No. 12/2002/L-Ctn, 7 June 2002.
- 50.
Chapter 3, Article 9 EVFTA (Definitions) reads: “For the purposes of this Section: (a) “domestic industry” shall be understood in accordance with subparagraph 1(c) of Article 4 of the Safeguards Agreement. To that end, subparagraph 1(c) of Article 4 of the Safeguards Agreement is incorporated into and made part of this Agreement, mutatis mutandis; (b) “serious injury” and “threat of serious injury” shall be understood in accordance with subparagraphs 1(a) and 1(b) of Article 4 of the Safeguards Agreement. To that end, subparagraphs 1(a) and 1(b) of Article 4 of the Safeguards Agreement are incorporated into and made part of this Agreement, mutatis mutandis; (c) “transition period” means a period of 10 years from the entry into force of this Agreement.”
- 51.
Barfield (2005), p. 731.
- 52.
De Kok (2016).
- 53.
Agreement on Safeguards, Article 4.1(b).
- 54.
Chapter 3, Article 10 EVFTA (Application of a Bilateral Safeguard Measure) reads: “(1) If, as a result of the reduction or elimination of a customs duty under this Agreement, any good originating in the territory of a Party is being imported into the territory of the other Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to a domestic industry producing like or directly competitive goods, the importing Party may adopt measures provided for in paragraph 2 in accordance with the conditions and procedures laid down in this Section during the transition period only, except as otherwise provided for in subparagraph 5(c) of Article 3.11 (Conditions and Limitations). (2) The importing Party may impose a bilateral safeguard measure which: (a) suspends the further reduction of the rate of customs duty on the good concerned as provided for in Annex 2-A (Elimination of Customs Duties); or (b) increases the rate of customs duty on the good to a level which does not exceed the lesser of: (i) the most-favoured-nation applied rate of customs duty on the good in effect at the time the measure is taken; or (ii) the base rate of customs duty specified in the Schedules included in Annex 2-A (Elimination of Customs Duties) pursuant to Article 2.6 (Reduction or Elimination of Customs Duties on Imports).”
- 55.
National Assembly Standing Committee Ordinance on Safeguards in Import of Foreign Goods into Vietnam, No. 42-2002-PL-UBTVQH10, 25 May 2002.
- 56.
Government Decree detailing the implementation of the ordinance on safeguards in the import of foreign goods into Vietnam, No. 150/2003/ND-CP, 8 December 2003.
- 57.
Chapter 3, Article 11.3 EVFTA.
- 58.
Chapter 3, Article 12 EVFTA (Provisional Measures) reads: “In critical circumstances where delay would cause damage that would be difficult to repair, a Party may apply a bilateral safeguard measure on a provisional basis pursuant to a preliminary determination that there is clear evidence that imports of an originating good from the other Party have increased as the result of the reduction or elimination of a customs duty under this Agreement, and that such imports cause serious injury, or threat thereof, to the domestic industry. The duration of any provisional measure shall not exceed 200 days, during which time the Party shall comply with the requirements of paragraphs 2 and 3 of Article 3.11 (Conditions and Limitations). The Party shall promptly refund any tariff increases if the investigation referred to in paragraph 2 of Article 3.11 (Conditions and Limitations) does not result in a finding that the requirements of paragraph 1 of Article 3.10 (Application of a Bilateral Safeguard Measure) are met. The duration of any provisional measure shall be counted as part of the period prescribed by subparagraph 5(b) of Article 3.11 (Conditions and Limitations).”
- 59.
Chapter 3, Article 13 EVFTA (Compensation) reads: “(1) A Party applying a bilateral safeguard measure shall consult with the other Party in order to mutually agree on appropriate trade-liberalising compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the safeguard measure. The Party shall provide an opportunity for such consultations no later than 30 days after the application of the bilateral safeguard measure. (2) If the consultations under paragraph 1 do not result in an agreement on trade liberalising compensation within 30 days after the consultations begin, the Party whose goods are subject to the bilateral safeguard measure may suspend the application of concessions, with respect to originating goods of the Party applying the bilateral safeguard measure, which have trade effects substantially equivalent to the bilateral safeguard measure. The obligation to provide compensation, incumbent on the Party applying the bilateral safeguard measure, and the other Party’s right to suspend concessions under this paragraph shall terminate on the same date as the bilateral safeguard measure terminates. (3) The right of suspension referred to in paragraph 2 shall not be exercised for the first 24 months during which a bilateral safeguard measure is in effect, provided that the safeguard measure conforms to the provisions of this Agreement.”
- 60.
See generally Piérola (2014).
- 61.
- 62.
The AANZFTA was signed on 27 February entered into force on 10 January 2010.
- 63.
The ASEAN-China FTA entered into force on 1 July 2007.
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Chaisse, J., Sejko, D. (2018). The Latest on the Best? Reflections on Trade Defence Regulation in EU-Vietnam FTA. In: Bungenberg, M., Hahn, M., Herrmann, C., Müller-Ibold, T. (eds) The Future of Trade Defence Instruments. European Yearbook of International Economic Law(). Springer, Cham. https://doi.org/10.1007/978-3-319-95306-9_13
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