DISPOSITIONS ON SANITARY AND PHYTOSANITARY (SPS) MEASURES IN THE NEW GENERATION OF FREE TRADE AGREEMENTS OF VIETNAM

MASTER THESISDISPOSITIONS ON SANITARY AND PHYTOSANITARY SPS MEASURES IN THE NEW GENERATION OF FREE TRADE AGREEMENTS OF VIETNAM Specialization: International Trade Policy and Law FULL N

MASTER THESIS

DISPOSITIONS ON SANITARY AND

PHYTOSANITARY (SPS) MEASURES

IN THE NEW GENERATION OF

FREE TRADE AGREEMENTS OF VIETNAM

Specialization: International Trade Policy and Law

FULL NAME: LE NGOC TRAM

Hanoi – 2019

MASTER THESIS

DISPOSITIONS ON SANITARY AND

PHYTOSANITARY (SPS) MEASURES

IN THE NEW GENERATION OF

FREE TRADE AGREEMENTS OF VIETNAM

Major: International Economics Specialization: International Trade Policy and Law

Code: 8310106

Full name: Le Ngoc Tram Supervisor: Dr Nguyen Ngoc Ha

Hanoi - 2019

made under the guidance of my supervisor, Dr Nguyen Ngoc Ha The contents andresults of this research are completely honest The information, data and documentswhich are collected from various sources for analysis and evaluation have beenfully cited in the main content and in the references list of this master thesis as well.

Student,

Le Ngoc Tram

LIST OF TABLES ii

LIST OF ABRREVIATIONS iii

ABSTRACT v

INTRODUCTION 1

1 Research rationale 1

2 Literature review 2

2.1 Analysis of new generation free trade agreements and SPS measures within the framework of WTO 2

2.2 SPS measures in the context of free trade agreements and dispositions of SPS measures in the new generation free trade agreements of Vietnam 4

2.3 Vietnam’s legislation in compliance with SPS commitments in NGFTAs .6 3 Research objectives 8

4 Research questions 8

5 Scope of research 9

6 Research methodology 9

7 Structure of thesis 10

CHAPTER 1: OVERVIEW OF SPS PROVISIONS IN THE NEW GENERATION FREE TRADE AGREEMENTS 11

1.1 Overview of new generation free trade agreements 11

1.1.1 Definition of new generation free trade agreements 11

1.1.2 Legal basis of new generation free trade agreements 12

1.1.3 Characteristics of new generation free trade agreements 13

1.1.4 Roles of new generation free trade agreements 16

1.2.1 SPS Agreement in WTO 24

1.2.2 Legal basis of SPS measures in the new generation free trade agreements .35

1.2.3 Criteria to assess Vietnam’s legislation on SPS measures 36

CHAPTER 2: DISPOSITIONS ON SPS MEASURES IN THE NEW GENERATION FREE TRADE AGREEMENTS OF VIETNAM 38

2.1 A confirmation of WTO’s SPS obligations 40

2.1.1 Definitions, rights and obligations 40

2.1.2 Special and differential treatment 41

2.1.3 Dispute settlement in accordance with WTO’s provisions 41

2.2 Supplements beyond WTO’s SPS obligations 43

2.2.1 Equivalence 43

2.2.2 Risk assessment 45

2.2.3 Regionalized concept 46

2.2.4 Transparency, competent authorities and contact points 48

2.2.5 Dispute settlement beyond WTO’s obligations 51

2.2.6 SPS Committee 52

2.2.7 Emergency measures 53

2.2.8 Cooperation 54

2.2.9 Control, inspection and approval procedural specifics 57

2.2.10 Tobacco control measures and Halal requirements 62

2.3 General evaluations on SPS measures in the new generation free trade agreements 63

2.3.3 Containing more specific procedures 65

2.3.4 Enhancing the transparency 66

CHAPTER 3: VIETNAM’S SPS MEASURES LEGISLATION AND RECOMMENDATIONS FOR VIETNAM IN THE IMPLEMENTATION OF SPS PROVISIONS IN ITS NEW GENERATION FREE TRADE AGREEMENTS 67

3.1 SPS measures legal framework of Vietnam 67

3.1.1 Overview of Vietnam’s SPS measures legislation 67

3.1.2 Sources of SPS measures legislation in Vietnam 71

3.2 The compatibility of Vietnam’s legal framework with its new generation free trade agreements’ SPS commitments 74

3.2.1 New generation free trade agreements’ commitments that Vietnam’s legislation is compatible 74

3.2.2 New generation free trade agreements’ commitments that Vietnam’s legislation has not been compatible with 82

3.3 Effects of SPS measures in the new generation free trade agreements’ on Vietnam’s legislation 88

3.4 Recommendations for Vietnam in the implementation of SPS dispositions in the new generation free trade agreements 89

3.4.1 Improving provisions in Vietnam’s legislation in accordance with regulations of new generation free trade agreements 89

3.4.2 Raising awareness of SPS measures in the new generation free trade agreements 95

CONCLUSION 97 LIST OF REFERENCES 99

In order to complete this master thesis, I have been received enthusiasticguidance and support from my lectures, family and friends From the bottom of myheart, I would like to express my thanks to them

Firstly, I would like to express the sincerest thanks to my supervisor, Dr.Nguyen Ngoc Ha who has supported, guided and encouraged me during thecompletion of this master thesis from choosing the topic, outlining the main ideas,turning those ideas into this thesis to editing this paper Without his enthusiastic andexcellent guidance and support, I could not have completed this master thesis

Also, I would like to express my special thanks to all lectures of the Master ofInternational Policy and Law program, Foreign Trade University as well as WorldTrade Institute who gave me the chance to broaden my humble horizon in the field

of economics and laws

Last but not least, I would like to express my warm thanks to my family, mycolleagues and my friends who never stop supporting, encouraging and giving methe favorable conditions to complete this master thesis

LIST OF TABL

Table 2.1: A confirmation of WTO's obligations 38Table 2.2: Supplements beyond WTO’s SPS obligations 39YTable 3.1: Vietnamese legal documents regulating SPS measures 71

LIST OF ABRREVIATIONS

Abbreviatio

n

Full name

APEC Asia – Pacific Economic Cooperation

ASEAN Association of South East Asian Nations

CODEX Codex Alimentarius Commission

CPTPP Comprehensive and Progressive Trans – Pacific Partnership

AgreementCSR Corporate social responsibility

CTC Cooperative Technical Consultation

DSU Dispute Settlement Understanding

EAEUFTA Vietnam – the Eurasian Economic Union FTA

EVFTA EU – Vietnam Free Trade Agreement

FAO Food and Agriculture Organization

GATS General Agreement on Trade in Services

GATT General Agreement on Tariffs and Trade

IICA Inter – American Institute for Cooperation on AgricultureIPPC International Plant Protection Convention

NGFTA New generation Free Trade Agreement

OIE Organization for Animal health

PTA Preferential Trade Agreement

SPS Sanitary and Phytosanitary

STDF Standards and Trade Development Facility

TPP Trans – Pacific Partnership Agreement

VKFTA Vietnam – Korea Free Trade Agreement

WTO World Trade Organization

New generation FTA is an inevitable tendency for members to deeplycooperate in a variety of areas, including SPS measures Joining NGFTAs, Vietnam

is not out of that tendency, therefore, Vietnam has to fully comply with

commitments regulated in NGFTAs With topic “Dispositions on Sanitary and

Phytosanitary (SPS) measures in the new generation of Free Trade Agreements of Vietnam”, the thesis focuses on similarities and differences on regulations between

SPS Agreement (WTO) and NGFTAs of Vietnam in order to point out thedispositions on SPS measures Not limited to this, the thesis analyzes Vietnam’slegal documents on SPS measures compared to regulations stated in NGFTAs Following that, the thesis mainly focuses on several issues and gains someachievements as below Firstly, the thesis comprehensively analyzes regulations onSPS measures in SPS Agreement (WTO) and NGFTAs of Vietnam As a result, thesimilarities and differences between them are stated Based on that, the thesisreveals that NGFTAs of Vietnam not only reconfirm regulations on SPS measures

of SPS Agreement, but also have supplementary regulations

Secondly, the thesis details Vietnam’s legal documents on SPS measures inorder to state the compatibility and not compatibility of legal documents on SPSmeasures compared to NGFTAs of Vietnam Each provision on SPS measures isanalyzed so as to point out for which provisions Vietnam’s legislation fullycomplies and for which provisions Vietnam’s legislation party and not complies.Thirdly, based on analysis above, recommendations for Vietnam to fullycomply with regulations on SPS measures when joining NGFTAs are revealed.Besides complying with regulations stated in NGFTAs, recommendations forVietnam to take advantage of NGFTAs are also pointed out

1 Research rationale

In the context of globalization, countries have a tendency to extensively andcomprehensively cooperate in a variety of areas, therefore, the number newgeneration free trade agreements (NGFTAs) has increased significantly andgradually replaced traditional free trade agreements (FTAs) NGFTAs focus on newissues such as labor, sustainable development and the environment which are notmentioned in traditional FTAs

Vietnam has joined sixteen FTAs1, including several typical NGFTAs, forexample, the Comprehensive and Progressive Trans – Pacific PartnershipAgreement (CPTPP), Vietnam – EU FTA (EVFTA), Vietnam – Korea FTA(VKFTA) and Vietnam – the Eurasian Economic Union FTA (EAEUFTA)2 Beingdifferent from traditional FTAs, NGFTAs have broad scope of commitments andstrict requirements3 on areas such as environment, sustainable development andhuman, animal or plant life or health besides economic growth

As for area related to human, animal or plant life or health, compared to SPSAgreement (WTO), NGFTAs contain strict requirements and requirements whichare beyond regulations of SPS Agreement, for example, import requirements andprocedures, verifications, audits and inspections, procedure for listing ofestablishments, certification and documents confirming safety, and regulations ontobacco control measures and halal products Besides, Vietnam has potential onproduction and exportation of agricultural and aquatic products which aresignificantly affected by regulations on SPS measures when Vietnam ratifiedNGFTAs In order to increase exportation of agricultural and aquatic products to its

1 WTO Center, Tổng hợp các FTA của Việt Nam tính đến tháng 11/2018 (Summary of FTAs of Vietnam until

November, 2018), 2018b, at < tinh-den-thang-112018 >, accessed on 29th Oct 2018.

http://www.trungtamwto.vn/chuyen-de/12065-tong-hop-cac-fta-cua-viet-nam-2 Le Thi Thuy, “Hiệp định thương mại tự do thế hệ mới: Cơ hội và thách thức đối với Việt Nam” (New

generation FTAs: opportunities and challenges for Vietnam), Journal on science and society of Vietnam,

Vol.5 (114), 2016, p.19.

3 Ibid., p.19 – 20

partners’ market in NGFTAs, and take advantages of NGFTAs, Vietnam has tocomply with strict regulations on SPS measures in NGFTAs

The number of NGFTAs which Vietnam has joined and ratified has increasedsince the year 20154, but most legal documents related to SPS measures were issuedbefore that point of time As a result, there is a gap between regulations on SPSmeasures in NGFTAs of Vietnam and Vietnam’s legislation of that area In order toeffectively take advantage of opportunities brought by NGFTAs and comply withcommitments on SPS measures regulated in NGFTAs that Vietnam officially signedand has implemented, Vietnam’s legal framework on SPS measures should beamended and improved

For the reasons mentioned above, the topic “Dispositions on Sanitary and

Phytosanitary (SPS) measures in the new generation of Free Trade Agreements of Vietnam” is chosen to reveal the disposition of SPS measures in

NGFTAs of Vietnam compared to those of WTO Also, the gap of regulations onSPS measures between NGFTAs of Vietnam and Vietnam’s legislation is pointedout Based on that analysis, the paper will give some recommendations onVietnam’s legislation to fully implement regulations on SPS measures of NGFTAs

2 Literature review

While there is a huge number of researches being conducted on NGFTAs andSPS measures in the framework of WTO, not many researches have carried out SPSmeasures in NGFTAs, especially, in NGFTAs of Vietnam This part of the thesiswill analyze several typical researches on NGFTAs and SPS measures in WTO

2.1 Analysis of new generation free trade agreements and SPS measures within the framework of WTO

Firstly, concerning NGFTAs, paper “What scope for an EU – ASEAN Free Trade Agreement”5 is a paper revealing potentials of EU – ASEAN FTA which isconsidered a NGFTA through analysis of general characteristics, trade and

4 WTO Center (2018b), op cit.

5 O’Callaghan and Nicolas, “What scope for an EU – ASEAN Free Trade Agreement”, Journal of World

Trade, Vol.42 (issue 1), 2008, p.105 – 128.

investment policies, trade restrictiveness and the correlative relation between twopartners (EU and ASEAN) Based on that, major features of potential EU – ASEANFTA which is a NGFTA are stated, for example, behind border measures andrequirements accommodating different capacity level To conclude, this paperemphasizes characteristics of NGFTAs such as addressing behind the border issues,broad scope of commitments and different timelines for different members.

Paper “New generation FTAs: opportunities and challenges for Vietnam”6

reveals several typical NGFTAs of Vietnam, for instance, EVFTA, CPTPP,VKFTA and EAEUFTA Also, characteristics of NGFTAs are analyzed such asbroad scope of commitments, high level of liberalization, institutional commitmentsand most participants being developed parties Then opportunities and challenges toVietnam when joining NGFTAs are revealed in this paper

Paper “Overview of new generation Free Trade Agreement”7 points outdefinition and characteristics of NGFTAs In addition, legal basis of NGFTAs isrevealed in this paper with several typical NGFTAs of Vietnam such as CPTPP andEVFTA

Furthermore, in paper “Role of NGFTAs in international trade”8, comparisonbetween NGFTAs and traditional FTAs is analyzed This paper focuses oncharacteristics of NGFTAs Based on the main characteristics of NGFTAs, rolesand effects of NGFTAs are stated In general, this paper mainly discusses thedifference of NGFTAs compared to traditional FTAs through particularcharacteristics of NGFTAs and its roles on one member’s economic anddevelopment

6 Le Thi Thuy (2016), op cit, p.19 – 29.

7 Nguyen Thanh Tam, “Tổng quan về các FTA thế hệ mới” (Overview of new generation Free Trade

Agreements), Education and Society Online Journal, 2016, at < quan-v-cac-fta-th-h-m-i.html >, accessed on 15th Oct 2018.

http://giaoducvaxahoi.vn/tin-phap-luat/t-ng-8 Vu Van Ha, “Vai trò của các hiệp định thương mại tự do thế hệ mới trong thương mại quốc tế” (Roles of

NGFTAs in international trade), Financial Journal, 2017, at

< do-the-he-moi-trong-thuong-mai-quoc-te-122913.html >, accessed on 20th Oct 2018.

http://tapchitaichinh.vn/nghien-cuu trao-doi/trao-doi-binh-luan/vai-tro-cua-cac-hiep-dinh-thuong-mai-tu-To sum up, there are many researches on NGFTAs which clearly point outdefinition, characteristics and roles of NGFTAs Several papers also carry outtypical NGFTAs of Vietnam, for example, CPTPP and EVFTA in order to statedifferences of those NGFTAs compared to traditional FTAs

Secondly, regarding SPS measures in the framework of WTO, as SPS

Agreement (WTO) was issued in the year 2008, there are so many researches onSPS measures in WTO This part of the thesis will point out several typical papers

on this issue Paper “Sanitary and Phytosanitary (SPS) issues”9 clearly focuses ondefinition of SPS measures Also, it carries out SPS Agreement (WTO) and its ruleswhen SPS measures are applied

Furthermore, paper of Office of the US Trade Representatives in the year 2014

“2014 Report on Sanitary and Phytosanitary Measures” 10 firstly provides overviewinformation of SPS measures, including definition of SPS measures, SPSAgreement (WTO) with its scope and its main provisions, and the reports ofindividual member on SPS measures In detail, definition of SPS measures is laws,decrees, requirements and regulations that governments apply to protect human,animal or plant life or health from risks of pests, diseases or toxins About SPSAgreement (WTO), this paper points out scope of SPS Agreement and its provisionswhich are appropriate level of protection, science – based measures, riskassessment, harmonization, transparency and SPS Committee

2.2 SPS measures in the context of free trade agreements and dispositions of SPS measures in the new generation free trade agreements of Vietnam

FTAs are becoming a vital and important feature in the trading world in order

to further the economic integration, replacing multilateral trade negotiations atWTO which has slow and unsatisfied process in multilateral trade liberalization.FTAs regulate not only tariff issues but other non – tariff issues such as SPSmeasures There are few papers which mention SPS measures in the context ofFTAs

9 European Commission, Sanitary and Phytosanitary (SPS) issues.

10 Office of the US Trade Representatives, 2014 Report on Sanitary and Phytosanitary Measures,

Washington D.C, the USA, 2014.

Paper “Role of Sanitary and Phytosanitary measures within the context of

Free Trade Agreement”11 mentions and analyzes definition of SPS measures, twofundamental principles of WTO in relation to SPS Agreement which are recognition

of equivalent SPS measures to protect human, animal or plant life or health and notcreating discrimination between members with identical and similar conditions.Based on that, the paper reveals that FTAs improve the concept of SPS nationalsovereignty in order to protect human, animal or plant life or health in relation tointernational trade between members It means that SPS measures with higher level

of protections are acceptable if they are based on scientific evidence Also, SPSmeasures in FTAs must be based on the transparency FTAs require to report otherrelevant parties if SPS measures applied have effects on international trade

Also, paper “Preferential Trade Agreement Policies for Development,

Chapter TBT and SPS measures, in practice”12 conducts SPS measures in thecontext of preferential trade agreements (PTAs) In particular, the paper states thatmembers use PTAs to deal with issues which could not be solved through WTO.This paper points out that PTAs include SPS provisions, incorporate cooperation onstandards, certification, and conformity assessment issues Also, PTAs are designed

to contribute to economic integration through the removal of related barriers Thenthis paper carries out SPS chapter of several typical agreements of North – SouthPTA and South – South PTA as examples

In addition, paper “Comparing EU Free Trade Agreements: Sanitary and

Phytosanitary Standards”13 reveals overview information of SPS Agreement,including principle provisions which are among the main provisions creatingcontent of SPS Agreement Based on that analysis, this paper compares individualprovision of NGFTAs of EU (EU – Mexico Global Agreement, EU – Chile

11 Alfonso Torres, “Role of Sanitary and Phytosanitary measures within the context of Free Trade

Agreements”, Rev Colom Cienc Pecua, Vol.26 No.1, 3/2013, p.43 – 47.

12 Andrew L Stoler, “Preferential Trade Agreement Policies for Development, Chapter TBT and SPS

measures, in practice”, in Jean – Pierre Chauffour and Jean – Christophe Maur, Preferential Trade

Agreement policies for development, World Bank Publication, Washington DC, 2011, p.217 – 233.

13 Bettina Rudloff and Johannes Simons, Comparing EU Free Trade Agreements: Sanitary and

Phytosanitary Standards, University of Bonn, 2004, at < 6B-Comparing-EU-Free-Trade-Agreements-Sanitary-Phytosanitary-2004.pdf >, accessed on 03rd Dec 2018.

https://ecdpm.org/wp-content/uploads/2013/11/IB-Association Agreement and Euro – Mediterranean https://ecdpm.org/wp-content/uploads/2013/11/IB-Association Agreements) withSPS Agreement in order to state which provisions of NGFTAs of EU confirm WTOprovisions and which provisions of NGFTAs of EU are beyond WTO provisions.Besides, there are some papers carrying out SPS measures in a few typical

NGFTAs of Vietnam (CPTPP and EVFTA) Concerning CPTPP, paper “Sanitary

and Phytosanitary measures in the context of the CPTPP Agreement”14 mainlyfocuses on new points of SPS measures regulated in CPTPP compared to SPSAgreement (WTO), for example, strengthening communication, consultation andcooperation between the parties, SPS Committee, transparency, special anddifferential treatment, equivalence, regionalization, auditing, and consultation(Cooperative Technical Consultations)

Paper “SPS measures and the TPP – Removing barriers to agricultural

exports”15 analyzes similarities and differences between provisions in SPS Chapter

of TPP and provisions in SPS Agreement This paper focuses on provisionsregulating import check, certification, regionalization, science and risk analysis,audit, and transparency provisions The main purpose of this paper is to point outwhich provisions of TPP reconfirm regulations on SPS Agreement and whichprovisions are beyond regulations of SPS Agreement

Furthermore, there are several papers which generally points out thesimilarities and differences on SPS measures between SPS chapter of only twoNGFTAs of Vietnam (CPTPP and EVFTA) and SPS Agreement (WTO) There is

no paper particularly focusing on analyzing SPS measures of four NGFTAs ofVietnam compared to SPS Agreement (WTO)

2.3 Vietnam’s legislation in compliance with SPS commitments in NGFTAs

Turning into Vietnam’s legislation and its compliance with SPS commitments

of NGFTAs, in book “Vietnam: Seizing the opportunities of new – generation free

14 Sofia Boza, “Sanitary and Phytosanitary measures in the context of the CPTPP Agreement”, Firenze

University Press, Vol.7 (1), 2018, p.87 – 98.

15 Sidley, SPS measures and the TPP – Removing barriers to agricultural exports, 2016.

trade agreements”16, chapter “Impact assessment of the TBT and SPS chapters ofTPP and EVFTA” generally points out SPS provisions in TPP and EVFTA differentfrom SPS Agreement Then this chapter of the book gives some recommendationssuch as consultations with industry associations, government agencies and partners

to promote understanding, and some focus points for reform and compliance efforts(introducing risk – based import control, encouraging the development of electroniccertificate, laboratory upgrading, promoting international standards) However, thispart does not specifically point out drawbacks of current Vietnam’s legislationcompared to NGFTAs, and detailed recommendations when Vietnam has joinedNGFTAs

To conclude, there are several points which are not mentioned in the previous

papers Firstly, papers only focus on general differences between provisions on SPS

measures of several NGFTAs of Vietnam (CPTPP, EVFTA) and those of SPSAgreement (WTO) It lacks papers which analyze and synthesize all similarities anddifferences between provisions on SPS measures of NGFTAs of Vietnam and those

of SPS Agreement (WTO) Secondly, there are papers on SPS measures of two

NGFTAs of Vietnam (CPTPP and EVFTA) only, and there is not any paperanalyzing SPS measures of two other NGFTAs of Vietnam (VKFTA, EAEUFTA)

Thirdly, there is no paper deeply conducting the compliance of Vietnam’s

legislation with SPS provisions regulated by four NGFTAs of Vietnam (CPTPP,

EVFTA, VKFTA and EAEUFTA) Fourthly, it lacks paper on detailed

recommendations for Vietnam in the implementation of SPS dispositions inNGFTAs

As a result, surplus above mentioned reasons, this paper will solve those

issues For the first and second issue, all provisions of SPS chapter of four

NGFTAs of Vietnam (CPTPP, EVFTA, VKFTA and EAEUFTA) will becomprehensively analyzed and compared with not only provisions of SPS

16 Ministry of Industry and Trade of Vietnam, World Bank Group, Vietnam: Seizing the opportunities of new

– generation free trade agreements, Proceedings of a joint event organized by Ministry of Industry and Trade

and the World Bank, 2016, p.99 – 135

Agreement (WTO) but also with each other in order to point out which provisionsare similar to those of WTO and which provisions are beyond regulations of WTO.

For the third issue, current Vietnam’s legislation will be carried out so as to

synthesize the level of compliance of Vietnam’s legislation with SPS commitments

in those four NGFTAs Based on all analysis above, the fourth issue will be

addressed with the detailed recommendations for Vietnam in the implementation ofSPS dispositions in NGFTAs, including but not limited to recommendations onimproving Vietnam’s legislation in accordance with regulations of NGFTAs

3 Research objectives

The main objective of this reasearch is to carry out characteristics and roles ofNGFTAs, new regulations on SPS measures of four NGFTAs of Vietnam (CPTPP,EVFTA, VKFTA and EAEUFTA) by comparing and pointing out similarities anddifferences between SPS regulations in those NGFTAs and SPS Agreement (WTO).Also, Vietnam’s legislation on SPS measures in three areas (human health,animal health and plant protection and quarantine) is analyzed as a basis to providerecommendations for amending and improving Vietnam’s legislation related to SPSmeasures in order to fully implement commiments on SPS measures in NGFTAs

4 Research questions

In order to clarify the research objectives above, this research reveals severalresearch questions:

 What are the characteristics of NGFTAs?

 What are the roles of NGFTAs?

 What is the legal basis of SPS provisions in NGFTAs?

 What are the similarities and differencies between SPS regulations of SPSAgreement (WTO) and four typical NGFTAs of Vietnam (CPTPP, EVFTA,VKFTA and EAEUFTA)?

 How do new regulations on SPS measures in those four NGFTAs of Vietnamaffect Vietnam’s legislation?

 How has Vietnam’s legislation of SPS measures been implemented?

 How could Vietnam’s legislation of SPS measures been improved inaccordance with commitments in those four NGFTAs?

5 Scope of research

This thesis will analyze overview information of NGFTAs, but it will analyzedmore detailed about four typical NGFTAs of Vietnam only, they are EU – VietnamFTA (EVFTA), Comprehensive and Progressive Agreement for Trans – PacificPartnership (CPTPP), Vietnam – Korea FTA (VKFTA) and Vietnam – the EurasianEconomic Union FTA (EAEUFTA)

In those four NGFTAs of Vietnam, this thesis focuses on SPS measures whichare regulated in SPS chapter of each NGFTA In particular, it makes a comparisonbetween regulations on SPS measures in SPS chapter of those four NGFTAs ofVietnam and regulations on SPS measures of SPS Agreement (WTO) in order topoint out similarities and differences between them

Furthermore, Vietnam’s legal documents on SPS measures will be carried out

in three fields like human health, animal health, and plant protection and quarantine.The thesis will point out which provisions on SPS measures of those four NGFTAs

of Vietnam are regulated and which provisions on SPS measures are beyondregulations of Vietnam’s legislation

After analyzing all parts above, the thesis will give several recommendationsfor Vietnam in the implementation of SPS measures in those NGFTAs of Vietnam

6 Research methodology

During the research of this thesis, different research methods are applied.Firstly, method to collect information and data from reference is used Relevanttextbooks, researches, articles, journals, reports and legal documents (NGFTAs ofVietnam, SPS Agreement and Vietnamese legal documents on SPS measures) areanalyzed in order to reveal overview of NGFTAs and SPS measures

Secondly, about methods for analyzing data, analysis and synthesis of theorymethod is applied In detail, each provision of SPS Agreement (WTO) and SPSChapter in NGFTAs is analyzed in order to reveal their regulations on SPSmeasures Also, regulations on SPS measures of Vietnam’s legal documents areanalyzed to give a deep insight about the regulations of Vietnam’s legislation onSPS measures Then, comparison method is applied to clarify the similarities anddifferencecs between regulations on SPS measures of SPS Agreement (WTO) andNGFTAs of Vietnam, and between NGFTAs of Vietnam and Vietnam’s legaldocuments In addition, synthesis method is utilized to point out the dispositions onSPS measures in NGFTAs of Vietnam and the gap between Vietnam’s legislation

on SPS measures

Thirdly, synthesis method is also used to carry out the compatiblity and notcompatibility between regulations on SPS measures of NGFTAs of Vietnam andVietnam’s legal documents and give several recommendations for Vietnam to fullycomply with commitments in NGFTAs of Vietnam

Chapter 3: Vietnam’s SPS measures legislation and recommendations for Vietnam

in the implementation of SPS provisions in its new generation free trade agreements

CHAPTER 1: OVERVIEW OF SPS PROVISIONS IN THE NEW GENERATION FREE TRADE AGREEMENTS

1.1 Overview of new generation free trade agreements

1.1.1 Definition of new generation free trade agreements

About concept of traditional FTAs, the term FTA is firstly shown in General

Agreement on Tariffs and Trade (GATT 1947) In detail, the definition of free trade

area has been revealed that “A free – trade area shall be understood to mean a

group of two or more customs territories in which the duties and other restrictive regulations of commerce […] are eliminated on substantially all the trade between the constituent territories in products originating in such territories” 17 Also, GATT

1947 states that “the provisions of this agreement shall not prevent the formation of

a customs union or of a free – trade area or the adoption of an interim agreement necessary for the formation of a customs union or of a free trade area” 18 In

general, Article XXIV of GATT 1947 only shows the definition of free trade area,but through that definition, the GATT 1947’s concept about FTAs could be seen asfollows

Firstly, contracting parties join FTAs to reduce tariff and other traderegulations Secondly, the goods originated from contracting parties receive benefitsfrom tariff and trade regulation reduction Thirdly, the concept of traditional FTAs

is suitable with the time of GATT 1947 when contracting parties mainly traded witheach other in tangible goods, so that GATT 1947 focuses on trade in goods Toconclude, the concept of traditional FTAs is mainly about trade in goods The level

of commitment between parties is about reduction of duty and trade regulations

Regarding the concept of new generation free trade agreements (NGFTAs),

since 1990s, the concept of traditional FTAs is not suitable with the development ofeconomic integration NGFTAs with broad scope of commitments and high level ofliberalization with commitments being beyond the trade in tangible goods gradually

17 See more in GATT 1947, Article XXIV, subparagraph 8b

18 Ibid., paragraph 5

replace traditional FTAs19 NGFTAs include not only tariff reduction but also otherissues under GATT/WTO (World Trade Organization) and new issues which arebeyond the WTO’s regulation Compared to traditional FTAs, NGFTAs cover newissues like labor, sustainable development and the environment It also covers someother issues such as human rights, counter – terrorism and democracy20.

To sum up, NGFTAs are treaties between contracting parties that agree on notonly tariff reduction but also other issues such as labor, the environment, humanrights and democracy NGFTAs have broader scope of commitments and higherlevel of liberalization than traditional FTAs21

1.1.2 Legal basis of new generation free trade agreements

In WTO, one of the most important principles is Most Favored Nation (MFN)

It means that WTO members must apply the same condition on all trade with otherWTO members However, there are some exceptions for this principle and it is thelegal basis of FTAs According to Article XXIV of GATT, contracting parties areallowed to create free trade areas or customs unions22 Following that, contractingparties could give more trade preferences to other parties in the free trade area orcustoms union than other parties This does not violate MFN principle ArticleXXIV of GATT lets contracting parties not apply MFN rules in some situations

Firstly, “a customs union shall be understood to mean the substitution of a single

customs territory for two or more customs territories, so that duties and other restrictive regulations of commerce are eliminated” 23 It can be seen thatcontracting parties could establish customs union and give preferences on duties and

other regulations for their partners Secondly, “a free – trade area shall be

understood to mean a group of two or more customs territories in which the duties and other restrictive regulations of commerce are eliminated […]” 24 Thirdly, “any

interim agreement shall include a plan and schedule for the formation of such a

19 Nguyen Thanh Tam (2016), op cit.

20 Vu Van Ha (2017), op cit

21 Le Thi Thuy (2016), op cit., p19 – 20.

22 Nguyen Thanh Tam (2016), op cit.

23 See more in GATT 1947, Article XXIV, subparagraph 8a

24 Ibid., subparagraph 8b

customs union or of such a free – trade area within a reasonable length of time” 25.

It can be revealed that contracting parties could establish temporary customs union

or free trade area within a reasonable length of time

Article XXIV of GATT establishes legal basis of free trade area Contractingparties could give others in the free trade area more preferences Although free tradearea is an exception, it has to comply with the following conditions Firstly, theduties and other regulations in free trade area do not create more barriers to tradewith the third parties It means that the establishment of free trade area does notcreate more restriction regulations on the third parties than before Secondly, theremust be regulations on “substantially all the trade between the territories”26 Thirdly,free trade area must be established within a reasonable length of time27 In addition,for trade in services, General Agreement on Trade in Services (GATS) also states

that “this Agreement shall not prevent any of its Members from being a party or

entering into an agreement liberalizing trade in services […]” 28 It can be seen thatGATS allows members to create FTA on trade in services

To sum up, firstly, WTO Agreements and FTAs have legal mutual relation.

The regulations in WTO are legal basis to create FTAs In order words, the contentand main provisions of FTAs are established based on provisions and agreements ofWTO For example, the chapter “Sanitary and Phytosanitary Measures” in FTAs isestablished based on Sanitary and Phytosanitary Agreement of WTO Secondly, it isstated that WTO regulations seem not to be sufficient to regulate the growinginternational trade and not cover all issues between members, therefore, NGFTAsare established to cover issues which are beyond WTO

1.1.3 Characteristics of new generation free trade agreements

With development of international trade, scope of commitments and level ofliberalization of traditional FTAs seem not to be suitable Therefore, traditional

FTAs are gradually replaced by NGFTAs which differ from traditional FTAs insome characteristics.

1.1.3.1 High level of liberalization

NGFTAs have higher level of liberalization than traditional FTAs The mainpurpose of traditional FTAs is tariff and trade regulations reduction on goodstraded, but tariff and trade regulations reduction is applied for some lines ofproducts only, while NGFTAs, which have higher level of liberalization, have tariffreduction on most lines of goods According to NGFTAs, tariff on about 95 percent

of lines of products is eliminated immediately after FTAs come into force29 As aresult, goods are more freely and easily traded between members in free trade area Also, NGFTAs include trade not only in goods but also in services Most types

of services in NGFTAs are under commitments between members It means thatbased on NGFTAs, members open up most types of services In summary, NGFTAshave higher level of liberalization than traditional FTAs because NGFTAs allowmembers to cut down tariff for most lines of goods and open up most types ofservices

1.1.3.2 Broad scope of commitments with strict requirements

The main difference between traditional FTAs and NGFTAs is that NGFTAshave broad scope of commitments which are not limited by trade in goods.Compared to traditional FTAs which cover trade in goods and mainly focus on tariffreduction, NGFTAs mention not only trade in goods but also other areas such aslabor, sustainable development and environment30 Also, NGFTAs cover some otherissues such as human rights, counter – terrorism and democracy31

In the context of globalization, requirements of members about all areas arehigher, especially in subjects like the environment, human health and life andsustainable development Therefore, most members pay attention to those areas

29 Vietnamese Logistics Association, Việt Nam trong xu hướng FTA thế hệ mới (Kỳ 1) (Vietnam in the

tendency of new generation FTAs), Vietnam Logistics Review, 2015, at < 2185.vlr >, accessed on 10th Nov 2018.

http://vlr.vn/logistics/news-30 Nguyen Thanh Tam (2016), op cit.

31 Vu Van Ha (2017), op cit.

because besides economic growth, members, especially developed ones mainlyfocus on sustainable development Although NGFTAs have broad scope ofcommitments than traditional FTAs, they have strict technical requirements andhigh standards in implementing the commitments32

1.1.3.3 Flexible schedule to comply with commitments

Although NGFTAs have broad scope of commitments and depth ofliberalization, this is not a barrier for developing or least developed members.Compared to traditional FTAs, timeline to apply commitments in NGFTAs isflexible but within the limits provided by WTO It means that NGFTAs createopportunities for developing members and least developed ones to adapt thecommitments in NGFTAs The timeline depends on the level of development andregulatory capacity of each member33, but it is within the limits provided by WTO

1.1.3.4 More impacts on domestic law

Traditional FTAs mainly focus on trade in goods, therefore, they have effects

on the border issues like tariff polices Unlike traditional FTAs, NGFTAs havecommitments on other issues such as labor and the environment which are issuesafter border So NGFTAs have more impacts on domestic law and policies ofmembers34

NGFTAs require each member to review its legal system, not only tariffpolicy, but also policy in other areas like trade facilitation, governmentprocurement, competition policy, non – tariff measures, investment, disputesettlement mechanism, intellectual property rights, services, labor and theenvironment Therefore, for example, in investment aspect, foreign and domesticinvestors are protected from unlawful interferences because of the transparentinvestment environment

32 Le Thi Thuy (2016), op cit., p 19 – 20.

33 O’Callaghan and Nicolas (2008), op cit., p.127

34 Vu Van Ha (2017), op cit.

1.1.3.5 Contracting parties of new generation free trade agreements with high level of economic development

Compared to traditional FTAs, NGFTAs have the participation of contractingparties with high level of economic development35 For example, the ASEAN FreeTrade Area (AFTA), which is a traditional FTA, includes developing parties, while

in some NGFTAs which Vietnam has recently signed, the partner is developedparties such as Korea (Vietnam – Korea FTA); EU members (Vietnam – EU FTA)

or Australia, Canada, Japan, Mexico, New Zealand, Peru, Singapore (CPTPP) Theparticipation of developed members in NGFTAs is a driving force for cooperationand extensive commitments within NGFTAs

1.1.4 Roles of new generation free trade agreements

1.1.4.1 Boosting trade liberalization

NGFTAs are an alternative strategy for members if they want to cooperate intrade and other areas WTO has so many members and each member has its ownstrategy, therefore, WTO negotiation rounds are difficult to come to finalagreement As analyzed, the characteristics of NGFTAs are depth of liberalizationand broad scope of commitments, so NGFTAs boost trade liberalization andcontribute to the economic growth of members36

NGFTAs significantly affect each member’s economy Firstly, when memberssign NGFTAs, they take advantages from tariff reduction and elimination It boostsregional trade among them Compared to traditional FTAs, NGFTAs have tariffelimination in most lines of products When tariff on goods dramatically decreases,price of imported products is lower than before because it not include import tax inthe final price As a result, trade grows significantly and trade turnover amongmembers also increases

Secondly, each member in free trade area could specialize in the production ofgoods which it has a comparative advantage due to tariff reduction and the free

35 Ibid.

36 Ibid.

movement of goods among members Thus, each member can take advantage ofefficiencies created from economic scales and increased output37 Also, eachmember’s specialization in one area, which it has comparative advantage, results inlower average cost and increase in productivity In other words, NGFTAs couldlead to each member’s increased production

Thirdly, NGFTAs with high level of liberalization and broad scope ofcommitments bring about production efficiencies On the one hand, high level ofliberalization improves the efficiency of resource allocation between members,which leads to higher productivity and the increase in the total domestic output ofgoods and services On the other hand, NGFTAs with liberalization increase thecompetition among producers, not only within one member, but also within the freetrade area Competition could encourage domestic producers use innovativemethods and new technology to increase productivity This could improve thequality of goods and bring advantages to customers Customers have a greatervariety of goods, services with high standard and lower price In other words,NGFTAs lead to the rising living standard, rising real income and higher rates ofeconomic growth for each member

1.1.4.2 Role of new generation free trade agreements in increasing joining standards

Although NGFTAs have high level of liberalization and broad scope ofcommitments, they have high standards for members when those members joinNGFTAs38 When discussing NGFTAs, members not only mainly focus on tariffreduction on trade in goods, but they also pay attention to other issues such as labor,environment, sustainable development and SPS measures to protect human, animal

or plant life or health

In traditional FTAs, those areas were rarely mentioned or even were notdiscussed because at that time, members mainly aimed at increase trade in goodswith others However, in recent years, the environment, sustainable development

37 Ibid.

38 Ibid.

and SPS measures to protect human, animal or plant life and health and sustainabledevelopment are important issues to each member, especially developed ones As aresult, standards for joining new generation free trade area are strict for members Inorder to become member in NGFTAs, each member has to accept those highstandards

High joining standards for each member such as the requirements inenvironment and SPS measures to protect human, animal or plant life or healthforce each member to improve the product quality, productivity, increase the livingstandard and protect the environment39

1.1.4.3 Creating new development opportunities for contracting parties

NGFTAs have broader scope of commitments than traditional FTAs NGFTAscover new areas such as labor, sustainable development and the environment Also,some other issues which are revealed in traditional FTAs and agreements of WTOsuch as trade in goods, trade in services and dispute settlement are more specificand detailed in NGFTAs40 For example, in trade in goods, NGFTAs have tariffelimination in most lines of products Also, commitments in other areas such asinvestment, SPS measures and intellectual property rights have stricter requirementsfor parties joining NGFTAs Those commitments are called “WTO plus”, becausethey are not only limited with regulations in WTO, but also extended and regulatedspecifically in NGFTAs41 Therefore, NGFTAs bring opportunity for parties todeeply cooperate in more fields than traditional FTAs Members not only have thechance to cooperate in areas like goods, services, but also in other new areas such aslabor, the environment and sustainable development

In addition, with broad scope of commitments and depth of liberalization,NGFTAs allow members to deeply involve in regional and global supply chain As

a result, members could not only focus on their national demands, but also payattention to the regional and global demands42 In summary, NGFTAs create the

chance for members, especially developing and least developed ones, to deeplycooperate in variety of areas

1.1.4.4 Important tool to ensure economic security

In the context of globalization, besides economic issue, members pay attention

to other areas such as economic security and political aspect Members could notdevelop without the cooperation with others, therefore, regional and globalcooperation is inevitable trend NGFTAs which have broad scope of commitmentsare an important tool for members to achieve political and economic security43 Also, when small members join NGFTAs, their position in the internationalarena could be improved, because cooperation with other members in NGFTAscould raise the ranking of small members through the regional position.Additionally, one characteristic of NGFTAs is that NGFTAs usually have memberswith high level of economic development (developed members) Therefore,NGFTAs have high standards and strict requirements for members which they joinNGFTAs Compliance with those standards and cooperation with big members inNGFTAs is a motivation for small members to improve all aspects and theirpositions in the international arena

1.1.4.5 Driving force for contracting parties to improve their legal system

NGFTAs have broad scope of commitments and depth of liberalization, soapart from tariff aspect, NGFTAs mention behind border issues such as tradefacilitation, government procurement, competition policy, non – tariff measures,investment, dispute settlement mechanism, intellectual property rights, services,labor and the environment In order to implement the commitments of NGFTAs,each party has to review its legal system and documents44

They have to review not only legal aspects related to trade in goods, trade inservices, investment, intellectual property rights and competition policy, but alsolegal issues related to aspects like labor, environment, SPS measures and

43 Ibid.

44 Nguyen Thanh Tam (2016), op cit.

sustainable development, because those areas are new, especially with developingones Therefore, they need more time to improve legal system To sum up, NGFTAsare a driving force for parties to improve institutional and legal systems

1.1.5 New generation free trade agreements of Vietnam

Vietnam has officially signed and implemented ten FTAs, finished negotiatingtwo FTAs and has four FTAs under negotiation45 In general, in recent years,Vietnam tends to join NGFTAs which have broader scope of commitments andhigher level of liberalization, for example, EU – Vietnam FTA (EVFTA),Comprehensive and Progressive Agreement for Trans – Pacific Partnership(CPTPP), Vietnam – Korea FTA (VKFTA) and Vietnam – the Eurasian EconomicUnion FTA (EAEUFTA)46

1.1.5.1 EU – Vietnam Free Trade Agreement (EVFTA)

EU – Vietnam FTA (EVFTA) is a NGFTA which is signed between Vietnamand twenty – eight European members EVFTA, which is announced to end thenegotiation on 2 December 2015, has not been signed and come into force47

EVFTA has all characteristics of a NGFTA Firstly, EVFTA has higher level

of liberalization compared to traditional FTAs Vietnam and EU agree to eliminatetariffs on more than 99 percent of tariff lines on goods traded between them.Vietnam and EU remove almost all tariff lines on goods traded between twomarkets For very few remaining tariff lines, Vietnam and EU agree to apply tariffquota or tariff reduction48 The reduction of most tariff lines will boost the trade ofgoods between two economies Secondly, EVFTA is a NGFTA which balances theinterest of both economies and is suitable with regulations of WTO The scope of

45 WTO Center (2018b), op cit.

46 Le Thi Thuy (2016), op cit., p.19

47 Thua Thien Hue Industry and Trade Department, Quá trình đàm phán Hiệp định thương mại tự do Việt

Nam – Liên minh kinh tế châu Âu (Negotiation process of EVFTA), 2016, at < tuc/tid/Qua-trinh-dam-phan-Hiep-dinh-Thuong-mai-tu-do-Viet-Nam-Lien-minh-Chau-Au/newsid/

http://itradetthue.gov.vn/Tin-4828FA50-A192-449A-A156-30BF6C1331BA/cid/1C5C9409-9C88-47A9-8AAE-7F1AC9D93220 >, accessed on 13th Dec 2018.

48 Cam An, Xóa bỏ 99% dòng thuế theo EVFTA (Removal of 99 percent of tariff lines in accordance with

EVFTA), Business Times Journal, 2015, at < thue-theo-evfta-67440.html >, accessed on 10th Dec 2018.

http://tapchitaichinh.vn/nghien-cuu-trao-doi/xoa-bo-99-dong-commitments of EVFTA is not limited to trade in goods and tariff reduction, itexpands to other areas such as sustainable development, and the environment49 Inaddition, issues related to environment and SPS measures are regulated with strictrequirements and high standards Thirdly, due to broad scope of commitments,especially behind the border issues, EVFTA significantly impacts on domestic law

of Vietnam Vietnam has to review legal system and documents to comply withcommitments in EVFTA Fourthly, EU is a customs union with 28 members whichare industrialized ones Therefore, cooperation with EU members could helpVietnam develop economy and improve other aspects with the assistance ofdeveloped members in EU

1.1.5.2 Comprehensive and Progressive Agreement for Trans – Pacific Partnership (CPTPP)

CPTPP, which is announced to finish negotiation on 25 January 2018, issigned on 8 March 2018, being expected to come into force in 2019 with theparticipation of eleven members (excluded the USA)50 CPTPP has allcharacteristics of a NGFTA Firstly, CPTPP has comprehensive market access andhigh level of liberalization The CPTPP reduces almost all tariffs and non – tariffbarriers on trade in goods and trade in services Members cut most tariff linesimmediately or after a very short time at which CPTPP comes into force In detail,members eliminate nearly 95 percent of tariff lines once the CPTPP comes intoeffect Also, those members will remove tariffs on the remaining goods in 5 to 10years Vietnam commits to remove almost all tariff lines on goods in theagreement51 Due to the tariff removal and reduction, CPTPP brings comprehensivemarket access for both Vietnam and EU They not only freely trade goods, but they

49 Ministry of Industry and Trade of Vietnam, Kết quả đàm phán Hiệp định Thương mại tự do giữa Việt Nam

và EU (Hiệp định EVFTA) (Results of negotiation on EVFTA), 2015a, at < chi-tiet/-/chi-tiet/ket-qua-%C4%91am-phan-hiep-%C4%91inh-thuong-mai-tu-do-giua-viet-nam-va-eu-hiep-

http://moit.gov.vn/web/guest/tin-%C4%91inh-evfta 105649-22.html >, accessed on 15th Jan 2019.

50 Ministry of Industry and Trade of Vietnam, Giới thiệu chung về Hiệp định CPTPP (Overview of CPTPP),

2019, at < 22.html >, accessed on 30th Jan 2019.

http://www.moit.gov.vn/tin-chi-tiet/-/chi-tiet/gioi-thieu-chung-ve-hiep-%C4%91inh-cptpp-13573-51 Financial Journal, TPP và cam kết xóa bỏ thuế xuất, nhập khẩu của Việt Nam (TPP and commitments to

remove tariffs), 2015, at < xoa-bo-thue-xuat-nhap-khau-cua-viet-nam-71925.html >, accessed on 01st Dec 2018.

http://tapchitaichinh.vn/nghien-cuu trao-doi/trao-doi-binh-luan/tpp-va-cam-ket-also focus on the goods which they have comparative advantage Regardingservices, CPTPP gives the opportunity to increase the openness of services sectorsbetween Vietnam and EU

Secondly, CPTPP has broad scope of commitments Apart from tariffreduction on almost all goods traded between two markets, CPTPP which has 30chapters and 4 annexes covers trade and other issues such as services, investment,intellectual property rights, SPS measures, competition policy, labor issues andenvironment52

Thirdly, as CPTPP’s scope is not limited to issues in the border like tariff, itexpands to other areas behind the border, so that CPTPP significantly impactsdomestic laws of each member This requires each member to review its legalsystem and amend laws and policies in accordance with commitments in CPTPP.Fourthly, CPTPP has eleven members and the majority of them participating inCPTPP are developed ones such as Canada, Mexico, New Zealand, Australia andJapan Therefore, developing member like Vietnam could receive technical supportsand driving force to improve legal system when becoming a member of CPTPP

1.1.5.3 Vietnam – Korea Free Trade Agreement (VKFTA)

Vietnam – Korea Free Trade Agreement (VKFTA) is a NGFTA which isannounced to end the negotiation on 10 December 2014, is signed on 5 May 2015,coming into force on 20 December 201553 VKFTA has all characteristics of aNGFTA Firstly, VKFTA has high level of liberalization South Korea liberalizes95.4 percent of the tariff lines, especially tariffs on key commodities of Vietnam’sexport such as agro – products and aqua – products which Vietnam has comparativeadvantage Also, South Korea, for the first time, commits to open market forproducts with high sensitivity such as shrimp, honey and ginger This gives

52 WTO Center, Tóm tắt văn kiện CPTPP (Summary of CPTPP), at

< http://www.trungtamwto.vn/upload/files/fta/174-da-ky-ket/175-cptpp-tpp11/177-noi-dung-hiep-dinh/Tom

%20luoc%20CPTPP%20-%20Van%20kien.pdf >, accessed on 15th Dec 2018.

53 Ministry of Industry and Trade of Vietnam, Ngày có hiệu lực của hiệp định thương mại tự do Việt Nam –

Hàn Quốc (VKFTA) (The effective date of VKFTA), 2015c, at <http://www.moit.gov.vn/tin-chi-tiet/-/chi-tiet/ ngay-co-hieu-luc-cua-hiep-%C4%91inh-thuong-mai-tu-do-viet-nam-han-quoc-vkfta 106377-22.html >, accessed on 26th Oct 2018.

Vietnam the opportunity to compete with other suppliers who aim at South Korea’smarket In addition, South Korea commits to market access in services, investmentand technical support so as to promote the economic relation between twomembers54 About Vietnam, Vietnam commits to reduce tariff by 92.7 percentwhich accounts for 89.2 percent of tariff lines, especially for industrial products55 It

is a good opportunity for South Korea when it accesses Vietnam’s market becausethe comparative advantage of South Korea to Vietnam is industrial products.Secondly, VKFTA has seventeen chapters which cover from trade in goods to otherareas such as trade in services, investment, intellectual property rights, SPSmeasures, rules of origin, customs facilitation, economic cooperation, tradesafeguard, e – commerce and competition56 Being different from traditional FTAs,VKFTA has broader scope of commitments Thirdly, because of high level ofliberalization and broad scope of commitments, VKFTA has impacts on domesticlegal system and issues behind the border of each member Furthermore, the partner

of Vietnam in VKFTA is South Korea which is a developed member in the world.Thus, cooperation with South Korea is a good chance for Vietnam to take advantage

of technical support

1.1.5.4 Vietnam – the Eurasian Economic Union FTA (EAEUFTA)

Vietnam – the Eurasian Economic Union FTA is an agreement betweenVietnam and five members of Eurasian Economic Union (Russia, Belarus,Kazakhstan, Kyrgystan and Armenia) EAEUFTA, which is announced to end thenegotiation on 15 December 2014, is signed on 29 May 2015, coming into force on

05 October 201657 EAEUFTA is a comprehensive agreement which liberalizes

54 Ministry of Industry and Trade of Vietnam, Lễ kí kết chính thức hiệp định thương mại tự do Việt Nam –

Hàn Quốc (VKFTA) (Ceremony on officially signing VKFTA), 2015b, at < tiet/-/chi-tiet/le-ky-chinh-thuc-hiep-%C4%91inh-thuong-mai-tu-do-viet-nam-han-quoc-vkfta 105109- 22.html >, accessed on 26th Oct, 2018.

http://www.moit.gov.vn/tin-chi-55 VCCI Uniting Entrepreneurs, VKFTA Agreement: Which kind of goods are deducted tax?, 2017, at

< https://e.vcci.com.vn/details-4543-VKFTA-Agreement-Which-kind-of-goods-are-deducted-tax.html >, accessed on 27th Oct 2018.

56 Ministry of Information and Communication of Vietnam, Một số nội dung chính của hiệp định FTA Việt

Nam – Hàn Quốc (Several main contents of VKFTA), Journal of technology, information and

communication, 2015, at < quoc.htm >, accessed on 26th Oct 2018.

http://ictvietnam.vn/mot-so-noi-dung-chinh-cua-hiep-dinh-fta-viet-nam-han-57 Ministry of Finance of Vietnam, EAEU Free Trade Agreement, 2015, at

trade between two parties with the commitment on tariff reduction In detail,Eurasian Economic Union commits to eliminate tariffs on nearly 90 percent of tarifflines, in which 59 percent of tariff lines are immediately eliminated once theagreement comes into force About Vietnam, Vietnam removes about 90 percent oftariff lines in 10 years58 It means that Vietnam and Eurasian Economic Union giveeach other the preference to access the partner’s market through the tariff reductionand removal on most tariff lines Also, Vietnam which is a developing one couldremove tariff in the schedule of 10 years Vietnam has sufficient time to graduallyopen its market and implement the commitment on tariff Furthermore, EAEUFTAhas broad scope of commitments EAEUFTA covers not only trade in goods, butalso other areas including rules of origin, customs and trade facilitation, SPSmeasures, TBT, investment, intellectual property rights, especially issues relatedSPS measures to protect human, animal or plant life or health, environment andsustainable development Because of broad scope, EAEUFTA has an impact ondomestic law As a result, when joining EAEUFTA, Vietnam has to review itsdomestic law to comply with the commitments.

1.2 Legal basis of SPS provisions in the new generation free trade agreements

1.2.1 SPS Agreement in WTO

1.2.1.1 Scope of SPS Agreement in WTO

According to SPS Agreement (WTO), SPS measures are defined as “any

measure to protect animal or plant life or health within the territory of the Member from risks arising from the entry, establishment or spread of pests, diseases, disease – carrying organisms or disease – causing organisms” or “any measures to protect human or animal life or health within the territory of the Member from risks arising

< http://www.mof.gov.vn/webcenter/portal/mof/r/lvtc/htqt/hnhttc/ftas/vcufta/vcuftagtc/vcuftagtc_chitiet? dDocName=BTC074537&showFooter=false&showHeader=false&_adf.ctrl-

state=ck11qb268_42&_afrLoop=55496515243544857#!%40%40%3F_afrLoop

%3D55496515243544857%26dDocName%3DBTC074537%26showFooter%3Dfalse%26showHeader

%3Dfalse%26_adf.ctrl-state%3D9dentbmjj_4 >, accessed 18th Nov 2018.

58 Ministry of Industry and Trade of Vietnam, Nhìn lại một năm Hiệp định thương mại tự do Việt Nam – Liên

minh kinh tế Á Âu có hiệu lực (One – year period after EAEUFTA came into force), 2017, at

< lien-minh-kinh-te-a-au-co-hieu-luc-7228-401.html >, accessed on 29th Oct 2018.

http://moit.gov.vn/tin-chi-tiet/-/chi-tiet/nhin-lai-mot-nam-hiep-%C4%91inh-thuong-mai-tu-do-viet-nam-from additives, contaminants, toxins or disease – causing organisms in foods, beverages or feedstuffs” or “any measure to protect human life or health within the territory of the Member from risks arising from diseases carried by animals, plants

or products thereof, or from the entry, establishment or spread of pests” or “any measure to prevent or limit other damage within the territory of the Member from the entry, establishment or spread of pests” 59

Based on Annex A of SPS Agreement, SPS measures consist of all relevantlaws, decrees, regulations, requirements and procedures which include inter alia,end product criteria; processes and production methods (PPMs); testing inspection,certification and approval procedure; quarantine treatment; and packing andlabelling requirements directly related to food safety60

Also, SPS Agreement states that it desired “the establishment of a multilateral

framework of rules and disciplines to guide the development, adoption and enforcement of SPS measures in order to minimize their negative effects on trade”

and furthers “the use of harmonized SPS measures between Members, on the basis

of international standards, guidelines and recommendations developed by the relevant international organizations” 61 In general, the scope of SPS Agreement isregulations on SPS measures

1.2.1.2 Legal basis of SPS Agreement in WTO

Based on GATT, Article XX(b) allows contracting parties to apply necessarytrade measures to protect human, animal or plant life or health as long as thosemeasures do not make discrimination between contracting parties with the sameconditions and those measures are not used as disguised restriction to trade62 Also,Article XX(b) of GATT let governments to impose more requirements on importedproducts than the requirements for the similar domestic products if the measures areapplied to protect human, animal or plant life or health Although GATT has two

59 See more in SPS Agreement (WTO), Annex A, point 1

60 Ibid., Definition, point 1

61 See more in the first part of SPS Agreement (WTO)

62 Andrew L Stoler (2011), op cit., p.218

important principles: MFN63 which requires non – discriminatory treatment ofimported products from different suppliers and NT64 which regulates that theproducts are treated no less favorable than domestic products, Article XX(b) ofGATT points out the exceptional situation in which government could enact morerestrictive requirements to protect human, animal or plant life or health if thosemeasures do not create discrimination and disguised protection to trade

Also, SPS Agreement states that “Sanitary or Phytosanitary measures which

conform to the relevant provisions of this Agreement shall be presumed to be in accordance with the obligations of the Members under the provisions of GATT

1994 which relate to the use of Sanitary or Phytosanitary measures, in particular the provisions of Article XX(b)” 65 To sum up, based on Article XX(b) of GATT,SPS Agreement is an agreement with more specific regulations on SPS measures toprotect human, animal or plant life or health, but still in accordance with theobligations of members under GATT

1.2.1.3 Main provisions of SPS Agreement

a Rights and obligations of members

SPS Agreement does not reveal any specific measures, but points out legalframework to apply measures to protect life or health of human, animal or plant andnot to discriminate or disguise restrictions on trade Article 2 of SPS Agreementreveals rights and obligations of members and also states that when each memberapplies SPS measures, that member has to follow those principles Firstly, SPSmeasures are used only to the extent necessary to protect human, animal or plant life

or health They must be based on scientific principles and are not kept withoutsufficient scientific evidence, except emergency situations Secondly, SPS measures

do not discriminate between members which have identical or similar conditions Thirdly, SPS measures should be based on international standards, guidelines andrecommendations Fourthly, SPS measures should encourage harmonization among

63 See more in GATT 1947, Article I

64 Ibid., Article II

65 See more in SPS Agreement (WTO), Article 2.4

members Accordingly, if SPS measures do not comply with one of the aboveprinciples, those measures may violate WTO rules and could be forced to cancel.

b Harmonization

The SPS Agreement encourages members to base their SPS measures onrecommended international standards, guidelines, and recommendations Thosemeasures must be necessary to protect human, animal or plant life or health

SPS Agreement does not define international standards in specific, but callsfor the members to base their SPS measures on international standards In order toharmonize global standards and due to the complexity of issues related to human,animal or plant life or health, three bodies appointed by WTO for implementing ofthe SPS Agreement are organizations known as “three sisters”66 They are theCodex Alimentarius Commission (CODEX) under the aegis of FAO and WHOwhich is responsible for food safety, the Secretariat of the International PlantProtection Convention (IPPC) which takes care of plant health and the WorldOrganization for Animal Health (OIE) which is responsible for animal health

In summary, in order to achieve global harmonization, national measures ofeach member should be based on the international standards, guidelines, andrecommendations revealed by international standard setting organizations (CODEX,IPPC and OIE) However, members could apply stricter SPS measures thanmeasures in accordance with international standards if they have sufficient scientificevidence

c Equivalence

According to Article 4 of SPS Agreement, members accept that the SPSmeasures of others are equivalent, even if those measures are different from themeasures of their own or from the measures by others trading in the same product.Exporting members have to prove that its measures satisfy the importing members’appropriate level of SPS protection It means that importing members accept theSPS measures of exporting members as equivalence, therefore, the goods are

66 Alfonso Torres (2013), op cit., p.43

checked in the exporting members instead of being checked in the importingmembers This brings advantages for exporting members when they export theproducts Also, importing and exporting members are encouraged to consult inorder to achieve agreements on recognition of the equivalence of SPS measures.Besides provision on “Equivalence” in SPS Agreement, in order to operatethis provision on the implementation of SPS measures, SPS Committee (WTO)published guidance No G/SPS/19/Rev.2 (WTO, 2004)67 on the application ofArticle 4 of SPS Agreement (WTO) in detail However, the guideline of SPSCommittee in equivalence is not compulsory and not an integral part of SPSAgreement (WTO), so members are not forced to follow that guidance Inparticular, based on the request of exporting members, importing members have toclarify the objectives and rationales of the SPS measures, point out the risks related

to SPS measures and reveal the appropriate level of protection The explanationshould be attached with a copy of the risk assessment or a technical justificationbased on international standards, guidelines or recommendations, according to No.G/SPS/19/Rev.2 (WTO, 2004)68

Regarding the time to respond, importing members should respond anyrequest of exporting members within a period of time (about six months)69 Inaddition, importing members quickly determine the equivalence if the products havebeen ever imported from the exporting ones In order to show that the products havebeen historically imported from the exporting members, some information should

be referred: the historic knowledge and confidence, the existence of an evaluationand recognition of the products in relation to a system of inspection andcertification, and the available scientific information70 Moreover, consideration ofimporting members by the request of exporting members is not a reason to interrupt

or delay the import procedure of exporting members to importing members.Concerning the technical assistance for developing members, members shall

67 WTO, Decision on the implementation of Article 4 of the Agreement on the application of Sanitary and

Phytosanitary measures, 2004

68 Ibid., Point 2

69 Ibid., Point 3

70 Ibid., Point 5

support others, especially developing ones, for the technical assistance to identifyand implement the SPS measures which are recognized to be equivalent

About exporting members, they have to provide scientific evidence andtechnical information to prove that their measure satisfies the appropriate level ofprotection which is identified by importing members Also, they are encouraged to

inform SPS Committee about the equivalence agreement or arrangement

d Risk assessment and appropriate level of SPS protection

In order to apply SPS measures, members of WTO shall ensure that thosemeasures are based on risk assessment including scientific evidence; relevantprocesses and production methods; inspection, sampling and testing methods;prevalence of specific diseases or pests; existence of pests – or diseases – free areas;ecological and environmental conditions; and quarantine or other treatment71 Inother words, members shall apply the “appropriate level of SPS protection” whichrequires basic obligations to make sure that the measures (1) are applied to theextent necessary in order to protect human, animal or plant life or health, (2) arebased on scientific evidence and (3) do not make unjustifiable discrimination anddisguised restrictions on trade72

Firstly, SPS measures must be applied to protect human, animal or plant life orhealth Secondly, regarding the scientific evidence, in order to consider whetherSPS measures are based on scientific evidence, two tests must be applied The firstone is risk assessment in which the scientific methods are used to determine theexistence of risks to human, animal or plant life or health The second test is riskcontrol in which the policy is chosen to protect human, animal or plant life or healthfrom risks and the measures are applied based on the results of risk assessment Infact, SPS measures which are based on reliable scientific evidence are satisfied toapply to protect human, animal or plant life or health

71 See more in SPS Agreement (WTO), Article 5.2

72 Alfonso Torres (2013), op cit., p.45