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Lawyer in Vietnam Oliver Massmann BREAKING NEWS The Trans Pacific Partnership Agreement VIETNAM WILL REAP HUGE BENEFITS

Trade ministers reached an agreement on the TPP on Monday (05 October 2015) after five days of intensive talks, following their failure to reach consensus in Hawaii in late July.
The TPP is one of the largest trade agreements ever to be negotiated, involving some of the largest nations in the world with an annual gross domestic product of nearly $28 trillion that represents roughly 40 percent of global GDP and one-third of world trade. Countries participating in the negotiations include those throughout the Asia- Pacific region, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. The TPP is touted to be the 21st century trade agreement, set a template for regional and global trade and investment and incorporate next-generation issues.
The TPP addresses a number of rising trade issues which have been stumbling blocks to global trade recently, such as e-commerce, financial services and cross-border electronic communications. Other cross-cutting issues are also covered, such as role of state-owned enterprises in the economy, government procurement, and other topics.
Vietnam would be the largest beneficiary of this trade pact as a result of its strong trade ties with the United States, and its highly competitive positions in industries such as manufacturing where China is gradually losing its competitive advantage. Vietnam is also considered as one of the countries among Japan, Malaysia, Brunei, New Zealand that the United States would like to establish formal trade agreements. Statistics shows that by participating in the TPP, Vietnam’s GDP would add an additional increase of 13.6% to the baseline scenario.

Some major points in the TPP are as follows:
Free trade zone: tariff and quotas have been long used as trade measures to protect domestic industries from cheap overseas goods and efficient sources of collecting revenue for the states, especially for developing ones. However, tariff and quotas have been used less compared with other non-tariff measures in the past years. With the TPP, tariff and non-tariff barriers are even reduced and removed more substantially across all trade in services and goods. TPP Parties, especially Vietnam, would gain many benefits from the upcoming business opportunities and open market access resulting from the trade pact.
Trade in goods
With tariff and non-tariff reduction and elimination on industrial goods, high quality- jobs will be supported and trade in a 800-million people market will increase. Most tariff elimination will be implemented immediately, with tariff on some other products will be reduced over a committed period of time. For elimination and reduction of restrictive policies on agricultural goods, food security will be enhanced. Vietnam’s agricultural products will have more opportunities to be exported to other TPP members and gain their competitive advantage due to cheap labors and natural endowments.
Trade in services
Trade in services is of utmost importance to all TPP Parties. Thus, all 12 countries give consent to a liberalized trade in this area. Besides incorporating basic WTO principles (national treatment, most-favored nation treatment, market access, and local presence), the TPP takes a negative approach, meaning that their markets are fully opened to service suppliers from other TPP Parties, except otherwise indicated in their commitments.
Comprehensive trade: The TPP includes commitments that seek to encourage participation and development of businesses of all levels and sizes. Small-and medium-sized businesses, which are quite popular in Vietnam, will receive assistance from other countries to understand the agreement, take advantage of their opportunities, build their own trade capacity to grow fast in the future.
Government procurement: All TPP parties commit to ensure transparent, predictable and non-discriminatory government procurement markets. National treatment and non-discrimination are core principles. Governments undertake to timely publish information on tender, allow sufficient time for bidders to prepare for and submit bids, maintain confidentiality of tenders. The TPP also requires its Parties assess bids based on fair and objective principles, evaluate and award bids only based on criteria set out in notices and tender documentation, create an effective regime for complaints and settling disputes, etc. These rules require all Parties, especially Vietnam, in the context of China’s bidders predominantly win the bids with cheap offer price but low-quality services, to reform their bidding procedures and protect their own interests by disqualifying tenders with poor performance and low capacity.
State-owned enterprises: Vietnam and Malaysia have many state-owned enterprises. The United States and others have some as well which are involved in public services and other activities. TPP negotiators have place emphasis on how to regulate operation of such enterprises, preferential treatment granted to these enterprises, non-discrimination of the state-owned enterprises against other countries’ goods and services. Participating in the TPP would then be a driving force for Vietnam in its privatization process of 432 state-owned enterprises in the 2014-2015 period. The remaining Vietnamese state-owned enterprise will also need to undergo strict reform procedures to meet standard requirements in the TPP.
Transparency and anti-corruption: The TPP includes rules on goods governance, bribery and corrosive anti-corruption, which have long been considered as one of the factors that discourage investors when deciding their business expansion, especially in countries like Vietnam with corruption index ranking Number 119 out of 175 countries globally according to Transparency International. The TPP Parties have agreed on adopting or maintaining laws criminalizing corruption behaviors by a public official affecting international trade or investment. Parties also commit to effectively enforce their anticorruption laws and regulations. As part of the TPP, Vietnam’s business environment in terms of transparency and “cleanliness” would be much improved, paving the way for more foreign investment in the upcoming time.
Other important trade and trade-related issues are covered in 30 chapters of the TPP, ranging from customs and trade facilitation; sanitary and phytosanitary measures; technical barriers to trade; trade remedies; investment; intellectual property; labor; environment; dispute settlement; etc. All TPP parties are conducting procedures to release the text of the agreement, which would then have to be approved domestically in each country member.
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Please do not hesitate to contact Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

BREAKING NEWS – EU – Vietnam Free Trade Agreement: In-principle agreement reached – Vietnam to benefit from greater market access for its goods and services – WHAT YOU MUST KNOW:

The Minister of Industry and Trade of Vietnam, H.E. Vu Huy Hoang and the European Commissioner for Trade, H.E. Cecilia Malmström agreed in principle on the Vietnam-EU Free Trade Agreement (FTA).
After a teleconference on the 4th August 2015 and three years of negotiations with commitments taken by both sides the FTA is considered one of the most comprehensive and ambitious trade and investment agreement. The legal text will be negotiated after the summer break and both sides are aiming to sign and ratify the agreement within this year. It is the second agreement in the ASEAN region after Singapore and it will intensify the bilateral relations between Vietnam and the EU.
The agreement will comprises of Trade of Goods, Rules of Origin, Customs and Trade Facilitation, Sanitary and Phytosanitary measures and Technical Barriers to Trade, Trade in Services, Investment, Trade Remedies, competition, State-Owned Enterprises, Government Procurement, Intellectual Property, sustainable Development, Cooperation and Capacity Building, Legal and Institutional Issues.
The FTA is considered to bring a positive impact for both sides especially for the Trade and Investment Sectors.
Nearly all customs duties – over 99% of the tariffs will be eliminated. The small remaining number is mainly due to the transition period. Vietnam will liberalize 65% of import duties on EU exports to Vietnam at entry into force and the remaining duties will be eliminated due to the next ten years; EU duties will be eliminated over a seven year period. The market will be opened for most of EU food products, i.e. wine, spirits and frozen pork meat will be liberalized after seven years and dairy products after a maximum of five years. The EU will eliminate duties for some sensitive products in the textile and footwear sector. The EU has offered access to Vietnamese exports via tariff rate quotas (TRQs), because some sensitive agricultural products will not be fully liberalized. Furthermore, the agreement will contain an annex with provisions to address non-tariff barriers in the automotive sector.
Regarding the investment sector, the FTA will be able to ensure an open and conductive business and investment environment, particularly will it help to promote the capital flow from the EU and gives Vietnam the opportunity to become a hub whilst connecting the EU’s trade and investments with the region. Both sides have achieved a lot, but the provisions concerning the investment protection and dispute settlements are still being negotiated.
The commitments made concerning investment, trade in service, government procurement, intellectual property rights, etc. will ensure an overall balance between both sides. Even Vietnam has to adapt new regulations. Those adjustments are in content with the Vietnamese attempt of administrative reforms to strengthen the country. Moreover Vietnam will achieve a grade of transparency and procedural fairness.
In the context of Intellectual Property Rights Vietnam has itself committed to standards which go beyond those of the WTO TRIP agreement and is creating a safer environment for EU innovations and brands and a stronger enforcement of those provisions.
Signing the FTA will have a broad impact on Vietnam, i.e. create more jobs and stabilize the welfare for Vietnam. Furthermore, there will be many opportunities to get access to modern technology and sharpen management skills.
There will be a framework within the FTA to resolve any future disagreement which may follow about the understanding and implementation of the agreement.

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Please do not hesitate to contact Mr. Oliver Massmann under omassmann@duanemorris.com if you have any questions on the above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

THANK YOU VERY MUCH!