CPTPP stirs motivation for reform

Friday, 2019-01-04 08:15:48
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Workers manufacturing precision mechanical components at the Fujikin Vietnam Co., Ltd., in the Vietnam - Singapore Industrial Park in Bac Ninh province. (Photo: NDO/Nguyen Dang)
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NDO – In addition to joining the previous World Trade Organisation (WTO), participating in a new-generation Free Trade Agreement, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), will be an opportunity for Vietnam to continue to improve its economic institution, including the socialist-oriented market economic institution.

This is also an important driving force to accelerate the process of reforming the growth model and economic restructuring, helping Vietnam to quickly improve its business environment in a more open, transparent manner and approaching advanced international standards, thereby promoting both domestic and foreign investment.

Overcoming the pressure

In order to realise its commitments in the CPTPP, Vietnam will have to adjust and amend multiple legal provisions on trade, customs, intellectual property and labour. Deputy Head of Multilateral Trade Policy Department (the Ministry of Industry and Trade) Ngo Chung Khanh said that Vietnam has to revise at least seven laws, with dozens of decrees and other related legal documents, in order to bring Vietnam's legal framework closer to international standards. Through participating in the CPTPP, Vietnam will also directly apply a range of commitments, especially in the fields of services and investment.

According to experts, Vietnam will overcome huge pressure to change the legal system to comply with the new standards under the CPTPP for a number of reasons. Firstly, the most difficult commitments, requiring great enforcement resources, as in the field of intellectual property, have been "suspended" by 11 CPTPP member countries after the withdrawal of the US.

Secondly, a range of new commitments are in line with the Party's guidelines and policies as well as the State's laws, for example, in the field of government procurement, environmental protection, State-owned enterprises, and small and medium-sized enterprises, thus easing the pressure to change the legal system.

Thirdly, not all commitments in the CPTPP lead to amendments, supplements or the issuance of new legal documents. Particularly the side letters and memorandums of understanding, which have been signed by Vietnam with ten member countries of the CPTPP, are flexible or give a longer time for Vietnam to implement its commitments, or more convenient for the country in a number of issues. Basically, such side letters and MoU’s are not contrary to the current regulations and laws of Vietnam and do not give rise to amendments and supplements to the law.

Finally, as previous experience when joining the WTO, with serious preparation and great efforts, Vietnam can successfully implement this workload, especially when it is entitled to follow the roadmap in CPTPP. Specifically, immediately after the agreement was signed, the Government of Vietnam directed the relevant ministries and agencies to coordinate with the Ministry of Justice to review the current regulations in legal documents under their responsibilities. From which, they will propose for amendment, supplement or appropriate enforcement to ensure compliance with the requirements of the CPTPP. It is expected that a programme to develop legislation for implementing the CPTPP, featuring the contents that need to be amended and supplemented, as well as the specific assignment for implementation and deployment deadline, will be issued to help the Government and the related ministries and agencies to implement it.

Active reform

Great pressure on institutional reform is also present when Vietnam accepts to join a common playground such as the CPTPP. After joining this agreement, Vietnam will have to maintain a continuous and quality reform momentum. On the contrary, if institutional reforms are passive, surely the challenges of the CPTPP will more than the opportunities it brings about. However, looking at the positive side, this is also an important driving force to help Vietnam accelerate its domestic institutional reforms, thus promoting the operation of the market economy in a comprehensive way and creating a more open and transparent business and investment environment.

Ngo Chung Khanh said the commitments in the CPTPP related to services and investment will have a positive effect in improving the investment environment, contributing to maintaining the growth momentum of domestic and foreign investment. Economic expert of the World Bank in Vietnam, Sebastian Eckardt, said that the most important benefit of the CPTPP for Vietnam is to help accelerate its domestic reform in many different areas. The implementation of the commitments in the CPTPP will further promote transparency and modern institution building. On the other hand, the very high standards of transparent governance and objective behaviours of the state apparatus in the CPTPP will help Vietnam to accelerate the process of improving the apparatus towards a streamlined, clean and strong one, while promoting administrative reform, increasing responsibility and preventing corruption, wastefulness and red tape.

In order to make the best use of the opportunities offered by the CPTPP, on the side of the State and the Government, it is necessary to actively conduct the necessary reforms in the management system from the central to local levels. On the enterprise side, it is important to improve competitiveness, capture information on commitments and market information, and take measures to seize opportunities, as international integration in general and international economic integration in particular always come with risks and challenges.

Experience in the international arena, as well as from Vietnam during its 30 years of Doi Moi (renovation) and international integration, has shown that the advantages are fundamental and essential, and risks and challenges can be completely controlled, if there is a consensus on awareness as well as action to prevent risks and overcome challenges.

High standards of transparent governance as well as objective behaviours of the state apparatus will pose major challenges for the management apparatus. They are also the standards that Vietnam is aiming for to build a true socialist rule-of-law state of the people, by the people and for the people, with eligible and quality civil servants.

According to a review by the Government, Vietnam needs to amend and supplement six laws, including the 2012 Labour Code; the 2005 Intellectual Property Law, amended in 2009; the 2015 Criminal Code; the 2015 Criminal Procedure Code; the 2000 Insurance Business Law and Law on Amendments and Supplements to a Number of Articles of the Insurance Business Law in 2010; and the 2010 Food Safety Law, to bring the domestic legal framework in line with the commitments in the CPTPP. In addition, there are 15 commitments that are directly applied, plus three international treaties in the field of intellectual property are proposed to join.