Setting legislative pathway to CPTPP implementation

Setting legislative pathway to CPTPP implementation

Within the framework of the Australia-Vietnam Economic Reform Program (Aus4Reform), on the morning of November 10, the Vietnam Chamber of Commerce and Industry (VCCI) in collaboration with the Central Institute for Management Studies (CIEM) held a conference on “Implementing the CPTPP from a law-making perspective – a review of current results and policy implications for the future”.

The CPTPP has been in effect for nearly three years in Vietnam. As the first high-standard, new-generation free trade agreement (FTA) that Vietnam has ever joined, it has a direct impact on many domestic legal institutions. Therefore, unlike with many previous FTAs, the work of amending, supplementing, and developing regulations to ensure compatibility is a top task. A significant part of this has been implemented in 2019-2020 with diverse new legal documents implemented at different levels.

At the opening of the conference, Hoang Quang Phong, vice chairman of the VCCI said, "Summarising the implementation process of law-making activities to implement the CPTPP and assessing the successes and shortcomings is very important. On one hand, this will serve as the basis for Vietnam to draw direct lessons for the next phase of implementation of our commitments with a longer roadmap and more challenging content. On the other hand, the policy implications can be a useful guideline for law-making activities to implement new-generation, high-standard FTAs in the coming time."

According to Charles Thursby-Pelham, first secretary of the Australian Embassy in Vietnam, “this comprehensive review of the law-making process will be a useful source of information for state agencies, the VCCI, associations, and each enterprise to look at the benefits of this agreement. It will also be a valuable foundation for the next steps of the implementation of the CPTPP, as well as FTAs in general.”

Regarding the legal documents issued to implement the CPTPP commitments with immediate effect, all the 11 documents (including two laws, two decrees, and seven circulars implementing 63 groups of CPTPP commitments on trade in goods, intellectual property, public procurement, and labour) are compliant with the Vietnamese Constitution and are legally in order.

They also do not contradict provisions from relevant laws. A summary provided by the VCCI showed that around seven laws, six decrees, and six circulars need to be revised or built, based on projections and plans by the National Assembly, government, and ministries. The VCCI has carried out a legal review of 11 legal documents issued to implement CPTPP commitments with immediate effect and four documents drafted to prepare for implementation in 2019-2021.

In terms of compatibility, most provisions of these legal documents are compatible with the CPTPP commitments that they internalise. Some of the new standards even exceed the necessary level, with higher commitments or earlier schedules (mainly related to the bidding process for the CPTPP package). There is only one case where regulations cannot guarantee the actual implementation of CPTPP commitments (on labour) and therefore need to be adjusted to ensure compliance.

Regarding law-making activities to prepare for the implementation of the CPTPP’s scheduled commitments, all four drafts of legal documents (three laws and one decree to implement 11 groups of commitments with schedules in 2022-2024 on market opening for goods, intellectual property, and labour) are compatible with CPTPP commitment requirements.

The VCCI has also made recommendations to improve the implementation of the CPTPP as well as Vietnam's newly-signed and effective FTAs. First, the review of compatibility with FTA commitments and building law-making plans to implement the commitments should be carried out in a more inclusive, cross-sectoral, transparent manner and in full consultation with stakeholders. Second, the drafting of legal documents should be done as soon as possible, even from the time the FTA is officially signed without waiting for ratification.

Third, drafting agencies should pay special attention to consulting businesses and affected stakeholders during the drafting process. The information provided to them should include not only the draft but also explanatory documents. Fourth, the process of implementing commitments needs to be regularly monitored, propagated, widely disseminated, and establish specific advisory and guidance focal points while immediately dealing with inadequacies as well as making prompt amendments and adjustments when necessary.

Finally, the objectives of law-making activities implementing FTAs need to be broadened to not only fulfil the "promises" made to FTA partners but also to develop legislation to meet the internal needs in the process of FTA integration.

At the conference, Ngo Chung Khanh, deputy director of the Multilateral Trade Policy Department of the Ministry of Industry and Trade and Cao Xuan Phong, head of the International Legal Research Department of the Institute of Legal Science, Ministry of Justice shared useful information on legal development and implementation of FTAs in general and the CPTPP in particular from the perspective of state agencies.

Tran Huu Huynh, chairman of the VCCI International Trade Policy Advisory Committee discussed building a legal framework beyond Vietnam's commitments to improve the business environment and support integration.

Pham Chi Lan, former vice president of the VCCI, again emphasised institutional challenges and solutions to continue effectively implementing the CPTPP in Vietnam in the context that the UK, China, and some new partners want to join the agreement.