Tran Thi Thu HangDeputy Director General

Ministry of Trade, Vietnam

FACTORS FACILITATING AND CHALLENGING NEGOTIATION OF

ENVIROMENT ISSUES IN RTA/FTA/WTO

VIETNAM ‘S EXPERIENCE

OUTLINE1.Environment issues in VN trade

agreements2.Vietnam Commitments on

environment services in WTO3.Challenging factors4.Facilitating factors5.Domestic coordination

Environment issues in Vietnam Trade agreementsState of play:Vietnam committed to liberalize

environment services in accordance with its GATS/WTO accession schedule

Vietnam is member of ASEAN Free trade area (CEPT) and joining ASEAN in FTA, CEP negotiation with Japan, Australia, India, USA… but no discussion on environment chapter

Environment issues in VN Trade agreements (cont’d)Vietnam engaged in more than 70

bilateral trade agreements with its trading partners. But no provision on environment protection or cooperation, except the Bilateral Trade Agreement with the USA (BTA) referring to Article 20 of GATT.

Vietnam is member of about 20 MEA where some trade related environment restriction provisions are applied.

Vietnam commitments on environment services in WTOVietnam started WTO accession negotiation

in 1995. The first offer was made in 2001 but no environment offer was presented.

In 2004, Vietnam concluded WTO accession negotiation package with EU at the margin of ASEM summit in Hanoi. The package included environment services . This paves the way for Ministry of Environment to make offer on environment services to be included in VN GATS offer in 2005

Vietnam commitments in WTO on environment services (1)Sewage Services (CPC 9401) :

no commitments made on cross border supply mode for market access and national treatment, except related consulting services.

No restriction on consumption abroad and commercial presence.

Apply 51 % cap on foreign ownership during 4 years after accession. Foreign companies are allowed to do business activities in Viet Nam in the form of build-operate-transfer (BOT) and build-transfer-operate (BTO).

Vietnam commitments in WTO on environment services (2)Refuse disposal services (CPC 9402):

no commitments on cross border supply mode for market access, except related consulting services.

No restriction on consumption abroad and commercial presence and NT.

Apply foreign ownership Cap 51 % during 4 years after accession. For public welfare, foreign-invested enterprises are restricted from collecting refuse directly from households, permitted to provide services at the refuse specific collection points. Import of refuse is forbidden.

Vietnam commitments in WTO on environment services (3)Cleaning services of exhaust gases (CPC

94040) and noise abatement services (CPC 94050): no commitments on cross border supply

mode and personal presence for market access and national treatment, except related consulting services.

No restriction on consumption abroad and commercial presence.

Apply foreign ownership Cap 51 % during 4 years after accession.

Vietnam commitments in WTO on environment services (4)Environmental impact assessment services

(CPC  94090*) : no commitments on personal presence for

market access and national treatment, except related consulting services.

No restriction on consumption abroad and commercial presence.

Apply foreign ownership Cap 51 % for commercial presence during 4 years after accession

Challenging Factors

Mandate is not clearly defined Competence factor: Regulatory competence

is not clearly allocated and dispatched among government agencies, especially environmental services regulations.

Political factor: environment services is a public services provided at almost zero fee and dominated by state monopoly. Liberalisation of environment services implies strong resistances.

Challenging FactorsLegislative factor: environmental and trade

related legislation is not completed and advanced.

Management factor: lack of common concepts about

environment services and its classificationEnvironment standards are not fully in

place and updatedLimited scope of environment services

provided in developing countries.

Challenging factorsCoordination factor:

Lack of coordination “mindset”Limited understanding about subject

matter and its scope by regulators/playersWeak overseeing and controlling

institutions among and within parties concerned

Not institutionalize new means of communication among government agencies (e.g emails, fax)

Challenging factorsConsultation factor:

Limited public participation in agenda setting and policy making due to: lack of active interest groups, lack of knowledge/awareness about environment issues

Weak role of business associations in trade-environment policies and debate

No institutionalized mechanism to take on board views from stakeholders. No public debate and monitoring mechanism after consultations

Challenging factors

Action factor:Limited awareness of businesses about

environment issues and their responsibility

Weak enforcement of laws, regulationsLack of dispute settlementsLimited human resource in trade related

environment regulation and negotiation

Facilitating factorsPolitical will: Every year, the Government

allocates 1 % GDP for environment protection (about 0.6 billion USD); about 200,000 -500,000 USD/year for trade related environment issues research

Common framework for actions or strategy is set, e.g 5 year Government Action Plan.

Social constituencyActive public campaign, awareness raising by

local authorities and environment departments

Facilitating factors• Leading role of “success business” in applying

ISO 14000 and creating environment friendly business

• Liberalize environment service ensures access to better and more affordable technologies for environment protection

• Environment friendly products = ease of exports

• Confidence building process through technical assistance from donors to provide arguments on the issues.

Domestic coordinationCoordination is institutionalized in laws/government regulations:Commercial Law in 2005;Law on environment protection in 2005;Laws on government organisation in 2001;National Plan on controlling environment

pollution till 2010 and strategies till 2020Government Decree 2005 governing

working mechanism of Ministries and government agencies

Domestic coordinationIntergovernmental working group

(Ministries of Trade, Environment, Planning and Investment and Finances) to jointly decide resources allocation for environment protection and balancing different priorities.

Intergovernmental negotiation team on environment issues

Coordinated actions among government agencies; central and local authorities are guided by 5 years/10 year action plans of the Government.

Thank you for your attention