English

Vietnam trade agreements: differences between EVFTA and TIPAT

The Government of Vietnam explained the substantial differences between the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP) and the Vietnam-European Union Free Trade Agreement (EVFTA).

As a preamble: despite the disruptions caused by the global Covid-19 pandemic, Vietnam’s economy grew 2.9% last year and is expected to grow 7% annually over the next five years, according to projections from the Center for Economic and Business Research (CEBR, for its acronym in English).

Differences between EVFTA and CPTPP

Regarding tariff elimination commitments:

In the EVFTA: Vietnam commits to eliminate tariffs when the Agreement enters into force with 48.5% of tariff lines.

Then, after 7 years, 91.8% of the tariff lines will be eliminated.

After 10 years, the tariff elimination is approximately 98.3% of the tariff lines.

In the CPTPP: Vietnam commits to eliminate import duties on 66% of tariff lines when the Agreement enters into force and 86.5% of tariff lines after 3 years.

Regarding trade in services and investment commitments:

In the EVFTA Agreement, the two parties develop a specific list of commitments according to the positive list approach.

The list of specific commitments in the EVFTA Agreement is only subject to the “standstill” principle.

Meanwhile, in the CPTPP Agreement, countries draw up a list of commitments according to the negative list approach.

In addition, countries also commit to apply the Ratchet principle, that is, only to adjust and change policies in the direction of a better level than previously applied.

In particular, Vietnam has a three-year transition period to apply this principle.

In relation to Public Procurement commitments:

The EVFTA and CPTPP agreements differ mainly in terms of commitments.

In the CPTPP, Vietnam only pledged to open up to central agency recruitment only.

However, in the EVFTA Agreement, Vietnam commits to make procurement open to both central and local agencies.

Regarding intellectual property commitments:

In the EVFTA, Vietnam commits to recognize and protect 169 EU GIs (mainly GIs used for wine and food), and the EU recognizes and protects 39 GIs of Vietnam.

In turn, in the CPTPP: the parties can protect a geographical indication through a trademark system or a separate system.

 

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