On June 8, 2020, the Vietnamese National Assembly unanimously ratified the new Vietnam-European Union Free Trade Agreement (EUVFTA) and the EU-Vietnam Investment Protection Side Agreement (EUVIPA). This was preceded by the approval of both agreements by the European Parliament on 12 February 2020. TUEFTA now entered into force on 1 August 2020. EUVIPA, which falls under the shared competence of the EU and its Member States, is currently in the process of national ratification by the regional and national parliaments of the EU Member States. TEUFTA is explained below. We will deal separately with EUVIPA if this agreement is ratified and enters into force. TEUFTA also broadly supports the sustainable development of infrastructure, including a preference for the use of renewable energy and energy-efficient goods and services. A separate chapter on non-tariff barriers and investments in renewable energy generation deals with specific rules on authorisation and authorisation procedures, compliance with existing international standards and local content requirements. In the future, the cooperation mechanisms and institutional reforms integrated into EUVFTA (as well as EUVIPA if fully implemented) should strengthen Vietnam`s position as a regional hub to attract investment despite the disruptions caused by the COVID-19 pandemic. This is now covered in EVIPA.
In the event of investment disputes (e.B. Expropriation without compensation or discrimination of investments), an investor has the right to bring the dispute before the Investment Court for settlement. In order to ensure fairness and independence in dispute settlement, a permanent court will be composed of nine members: three EU and Vietnamese nationals each, and three third-country nationals. Cases are heard by a court of three persons, chosen at random by the president of the court. It is also intended to ensure uniform decisions in similar cases, making dispute settlement more predictable. EVIPA also admits a single member of the court if the plaintiff is a small or medium-sized business or if compensation for harmful claims is relatively low. This is a flexible approach, given that Vietnam is still a developing country. Vietnam`s executive body, the National Assembly, has ratified important investment treaties with the European Union (“EU”) and adopted a number of other laws relevant to foreign investors.
The agreement was drafted with the aim of making the settlement of investment disputes faster and more transparent. The agreements must now be ratified by the Vietnamese National Assembly and, in the case of the investment protection agreement, by EU member states. EVFTA promotes and protects EU standards and values and reaffirms the EU`s focus on sustainability and civil society rights worldwide. In this context, a binding and comprehensive chapter on trade and sustainable development in the FTA is of particular importance, focusing specifically on the labour and environmental dimension in the context of strengthening trade and investment relations between the EU and Vietnam. This chapter sets out labour and environmental commitments for both parties, with specific commitments to effective implementation and other commitments to international labour standards and multilateral environmental agreements. It will also focus on further promoting the engagement of independent civil society groups on labour and environmental issues and improving bilateral exchanges between European and Vietnamese civil society on the environmental and social sustainability of EU-Vietnam trade and investment relations. The chapter on trade and sustainable development is particularly relevant as it addresses some of the most important issues raised in the context of the signing of this free trade agreement, in particular by the Social Democrats (S&D). They called for substantial progress in the field of human rights, labour rights and production standards in Vietnam before concluding a trade agreement with the country.
Thanks to concrete progress, such as the adoption of Vietnam`s reformed Labour Law at the end of 2019 and the binding roadmap to improve workers` rights contained in this chapter of the EVFTA, these concerns have been addressed in depth. Another important regulatory development of evFTA can be found in the significant progress made in the field of intellectual property rights (IPR). Vietnam has not only pledged to accede to the World Intellectual Property Organization (WIPO) Internet treaties and the Hague Convention on the International Registration of Industrial Designs, but the Free Trade Agreement also contains strict provisions aimed at improving the legal framework to effectively enforce the obligations arising from these obligations. An agreement on geographical indications was also signed, which will ensure the protection of 169 European geographical indications and 31 Vietnamese geographical indications, prevent abuse and falsification and further promote the movement of quality products between the two sides. Under euFVTA`s competition chapter, Vietnam and the EU agree to maintain competition law and to ensure that competent authorities apply those laws in a non-discriminatory and transparent manner. In order to combat anti-competitive behaviour and promote a fair trial, the agreement requires that the parties not enter into any agreement that could restrict or distort the examination or competition of a potential merger and acquisition. Overall, ASEAN is the EU`s third largest trading partner outside Europe (after the US and China). Ensuring better access for EU exporters to the dynamic ASEAN market is a priority for the EU. Negotiations on a TRADE and Investment Agreement between the REGIONS between the EU and ASEAN started in 2007 and were interrupted by mutual agreement in 2009 to make way for a bilateral negotiating format. These bilateral trade and investment agreements were conceived as building blocks of a future region-to-region agreement. The EVFTA is seen as a model for the EU to continue to conclude free trade agreements with various ASEAN countries with the ultimate aim of concluding a free trade agreement from one region to another once there is a sufficient critical mass of agreements with the various ASEAN countries.
[7] This process could take about 10 to 15 years. Therefore, Vietnam should use this window of opportunity before free trade agreements are concluded with others in the region and enter into force to become a regional center. Vietnam has one of the highest public investment-to-GDP ratios in the world (39% per year since 1995). [8] However, Vietnam has not yet accepted that its government procurement is covered by the WTO Agreement on Government Procurement (GPA). [9] Now Vietnam has pledged to do so for the first time in the EVFTA. The 8. In June 2020, after nearly 10 years of negotiations, the Vietnamese National Assembly ratified the EU-Vietnam Free Trade Agreement (EVFTA) and the Investment Protection Agreement (EVIPA). On 12 February 2020, the European Parliament gave its consent to the ratification of EVFTA and EVIPA. On 30 March 2020, the Council of Europe ratified the EVFTA.
Finally, the innovative agreement entered into force on 1 August 2020. Regarding the EVIPA, the Vietnamese government sent a diplomatic note to the EU delegation announcing the ratification of the EVIPA by the National Assembly, subject to the approval of the parliaments of the Member States. 1 In 2017, the Court of Justice of the European Union held that certain provisions of the EU-Singapore Free Trade Agreement on foreign direct investment and investor-state dispute settlement (ISDS) did not fall within the exclusive competence of the European Union and needed to be ratified by the national parliaments of the Member States of the European Union. In an effort to remove opposition to the trade deal, the EU and Singapore have therefore agreed to split the deal into two separate agreements. .