CPTPP Commitments and Distribution - E-commerce - Logistics sectors in Vietnam Nguyen Thi Thu Trang WTO and International Trade Center Vietnam Chamber of Commerce and Industry
Content Distribution, E-Commerce and Logistics Sectors? Relevant CPTPP commitments Market and sectors’ prospects in the context of CPTPP
Distribution - E-Commerce - Logistics Sectors in CPTPP negotiations
Distribution services? WTO CPTPP CPC System CPC, ISIC System Commission agents’ Similar to WTO services (CPC 621, 61111, 6113, Traditional markets, 6121) commodity exchanges Wholesale trade services Others (CPC 622, 61111, 6113, 6121) Retailing services (CPC 631 + 632, 61112, 6113, 6121) Franchising services
Logistics Services? There is no service sector and sub- Services auxiliary to all sector called “LOGISTICS” modes of transport Services auxiliary to WTO, CPTPP and other FTAs wholesale trade and have no commitment in retailing services LOGISTICS services Transport services (maritime, internal waterways, rail, road, Technical air, multimodal) inspection and analysis services Vietnamese legislation (Decree No.163/2017/NĐ -CP on business of logistics services) has no definition of “LOGISTICS services” but lists 17 specific services in LOGISTICS service group
E-commerce? Be a commercial mode on According to WTO, FTAs: the basis of digital E-commerce is not a technology and the service sector/ sub- internet sectors According to Decree No. 09/2018/NĐ - CP “ E-commerce services are commercial Good transaction activities whereby an e-commerce service supplier establishes an e- commerce website to provide a platform for businesses, organizations, individuals and others Service to carry out trade promotion transaction activities, sell goods or provide services ”
CPTPP commitments on Distribution - E-commerce – Logistics
CPTPP in Vietnam FTA Roadmap No. FTA Time Members FTAs in effect 1 AFTA Came into force since 1993 ASEAN 2 ACFTA Came into force since 2003 ASEAN, China 3 AKFTA Came into force since 2007 ASEAN, South Korea 4 AJCEP Came into force since 2008 ASEAN, Japan 5 VJEPA Came into force since 2009 Vietnam, Japan 6 AIFTA Came into force since 2010 ASEAN, India 7 AANZFTA Came into force since 2010 ASEAN, Australia, New Zealand 8 VCFTA Came into force since 2014 Vietnam, Chile 9 VKFTA Came into force since 2015 Vietnam, South Korea 10 VN – EAEU FTA Came into force since 2016 Vietnam, Russia, Belarus, Armenia, Kazakhstan, Kyrgyzstan 11 CPTPP Came into force since 2019 Vietnam, Canada, Mexico, Peru, Chile, New Zealand, Australia, Japan, Singapore, Brunei, Malaysia 12 AHKFTA Came into force since 2019 ASEAN, Hong Kong (China) Signed FTAs, not yet in effect 13 EVFTA Signed on June 30th, 2019 Vietnam, EU(28) FTAs under negotiation 14 RCEP Negotiations commenced in March, 2013 ASEAN, China, South Korea, Japan, India, Australia, New Zealand 15 Vietnam – EFTA FTA Negotiations commenced in May, 2012 Vietnam, EFTA (Switzerland, Norway, Iceland, Liechtenstein) 16 Vietnam – Israel FTA Negotiations commenced in December, 2015 Vietnam, Israel
CPTPP Structure 00 Preamble 16 Competition Policy 01 Initial Provisions and General Definitions 17 State-Owned Enterprises 02 National Treatment and Market Access for Goods 18 Intellectual Property 03 Rules of Origin and Origin Procedures 19 Labor 04 Textile and Apparel Goods 20 Environment 05 Customs Administration and Trade Facilitation 21 Cooperation and Capacity Building 06 Trade Remedies 22 Competitiveness and Business Facilitation 07 Sanitary and phytosanitary measures 23 Development 08 Technical Barriers to Trade 24 Small and Medium-sized Enterprises 09 09 Investm estment ent 25 Regulatory Coherence 26 Transparency and Anti-corruption 10 Cro ross-Bo Bord rder er Tra rade de in Servic vices es 27 Administrative and Institutional Provisions 11 Financial Services 28 Dispute Settlement 12 Temporar orary y Entr try y for r Busines iness s Pers rson ons 29 Exceptions and General Provisions 13 Telecommunications 30 Final Provisions 14 Electro ctronic nic Commerce erce And An Annex exes es, Side letters 15 Government Procurement
The method of negotiating service Mode of supply of market-opening services In Inves estm tmen ent Cro ross ss-bor order der Tra rade e in Ser ervi vice ce Similar to Mode 3 - Commercial presence in WTO: Similar to Mode 1, 2 and 4 in WTO • • Representative offices Mode 1: Cross-border trade • • Branches Mode 2: Consumption abroad • • Joint venture enterprises (with Vietnamese Mode 4: Movement of natural persons partners) • 100% foreign-invested enterprises
The method of negotiating service (continued) Market-opening Sectors/Sub-sectors Principle: Negative list Step 2: Step 1: A list of Scenario 1: basic “Select to Scenario 2: exclude” - Some market- The remaining services are services (not be opening “selected” (listed/ selected/listed/ principles reserved) to reserved) – shall “exclude” (not have (background comply with all to comply with obligations background a/some/all principles. ) background obligation)
Basic market-opening principles/obligations in CPTPP Mar arket et-openin opening g pri rincip ciples les in investm stment ent Mar arket et-openin opening g pri rincip ciples les in cro ross-bo bord rder er tra rade de in servic vices es Non-di discrimi scrimina natio tion n (NT-MFN) MFN) Non-di discrimi scrimina natio tion n (NT-MFN) MFN) Exception: Exception: • Specific procedures and/or reporting requirements separately for foreign • MFN shall not applied to (i) other Agreements before CPTPP, investors (ii) ASEAN, (iii) Agreement on maritime, seafood and aviation • MFN shall not be applied to (i) other Agreements before CPTPP, (ii) ASEAN, (iii) Agreements on maritime, seafood and aviation Perform rman ance ce Requiremen irements ts Mark rket et Acc ccess - A list of quantitative restrictions being prohibited - A list of prohibited measures in restricting/interfering investment or business activities - Prohibit restrictions / requirements on legal entity - Exception: requirements of employing local workers, requirements for public purpose Seni nior or Mana nageme gement nt and nd Boards rds of Directors ectors Local l presenc ence - Prohibit requirements regarding particular nationality of a natural person for Prohi hibi bit t to to impose e require ireme ments nts in: n: senior management position - Establishing representative offices or any form of enterprise - Exception: require a majority of the board of directors to be of a particular in its territory nationality or resident in the territory of the Party. - Being resident in its territory
Levels of services opening commitments Reserve a/some Reserve all/almost market-opening obligations market-opening obligations • Listed services/activity groups? • Listed services? • Listed reserved obligations? • Listed reserved obligations? Almost no reserve • “Covering” all remaining services • Reserved obligation: Market Access
Commitments to open Distribution market
Level of Comm mmitme itment nt Specif cific ic servi vices ces Rules es of openne nness ss Reserving most investment Traditional markets Vietnam reserves the following rights with respect to CPTPP service investors: obligations • Commodity exchanges Implementing discriminatory measures (between domestic and foreign parties, between foreign parties); • Requiring local presence; • Requiring manager to be of Vietnamese nationality or resident in Vietnam • Imposing performance requirements (requirements to satisfy some conditions to have a license or preference) Reserving a part of Commission agent Vietnam shall open to investments and cross-border services from CPTPP members at least equal to the obligations reserve level. Wholesale trade (limited opening Specifically, Vietnam has 02 reserves with respect to: Retailing commitments) • Types of distributed products (excluding rice and cane/beet sugar compared to the list of products not Franchising allowed to distribute by foreigners under the WTO and EVFTA) • Economic Needs Test regarding the establishment of outlets for retail services (open morel than WTO and equal to EVFTA) No reserve for most Other distribution services (if • Regarding to market access: Vietnam has the right to open only at the same level of that in WTO openness’s obligations and any) • Regarding to other aspects: Vietnam shall open market to CPTPP investors in accordance with general rules principals in investment and cross-border services under CPTPP.
Commitments to open Logistics market
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