Directive 38/CT-TTg on free trade agreements in force

DIRECTIVE

On intensified implementation and effective utilization of free trade agreements in force[1]

In implementation of the Party’s guidelines and policies on international economic integration, Vietnam’s international economic integration has achieved firm results, especially through the negotiation and conclusion of free trade agreements (FTAs). To date, Vietnam has signed and is implementing 10 regional and bilateral FTAs, including the ASEAN Free Trade Area (AFTA), the Framework Agreement on ASEAN-China Economic Cooperation and the ASEAN-China Trade in Goods Agreement to establish the ASEAN-China Free Trade Area (ACFTA), the ASEAN-Korea Trade in Goods Agreement to establish the ASEAN-Korea Free Trade Area (AKFTA), the ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEP) to establish the ASEAN-Japan Free Trade Area, the Agreement on Establishment of the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), the Framework Agreement on ASEAN-India Comprehensive Economic Cooperation and the ASEAN-India Trade in Goods Agreement to establish the ASEAN-India Free Trade Area (AIFTA), the Vietnam-Japan Economic Partnership Agreement (VJEPA),the Vietnam-Chile Free Trade Agreement (VCFTA), the Vietnam-Korea Free Trade Agreement (VKFTA), and the Vietnam-Eurasia Economic Union Free Trade Agreement (VN-EAEU FTA).

Over the recent years, the implementation of the above FTAs has exerted positive effects on the country’s economic development and modernization process, thus helping expand the export markets for Vietnam’s goods and products; enabled Vietnam to participate more intensively in the global value chain and production network; helped increase the export value of main commodity items and positively restructure the national economy; facilitated the improvement of the business environment toward simplicity and transparency for all enterprises; provided opportunities for Vietnamese enterprises to expand their business operation and increase their competitiveness; helped attract more investment capital, technologies, knowledge and management experience into the country, create more jobs and increase incomes for the people, thereby stabilizing the social security and enabling  consumers to access high-quality and competitive-price goods and services. Politically, the participation in and implementation of these FTAs over the recent years have also contributed to raising the country’s external profile, increased mutual benefits of the strategic partners and contributed to ensuring a peaceful and stable environment for national development. The ministries and sectors have been attempting to carry out necessary works to implement the agreements and support enterprises in taking advantages the implementation of these FTAs, such as translation of Vietnam’s commitments into domestic laws, public communication of the integration process and interpretation of commitments of the country, and study and assessment of effects of these FTAs.

However, there remain several shortcomings and limitations in the implementation of these FTAs. The awareness about these FTAs of the ministries, sectors, localities and enterprises, is not yet adequate and consistent; the implementation coordination is not yet synchronous and close; the dissemination among enterprises of policy information and provision of support to them in the implementation of FTAs in order to grasp all opportunities and cope with challenges of the FTA accession has not yet been properly carried out; the translation of international commitments into domestic laws as well as preparations of domestic entities, particularly enterprises, organizations and individuals, remain slow and lack a proactive mindset; there remains a dependence on certain goods items and markets; the mechanism for prevention and settlement of international investment and trade disputes remains ineffective, etc.

To continue implementing synchronously and utilizing effectively the FTAs in force, and at the same time actively make domestic preparations for the effective implementation of new-generation FTAs that Vietnam will soon accede to, the Prime Minister and the Head of the National Steering Committee for International Integration instruct some important and urgent tasks that need to be performed in the coming time as follows:

1. The Interdisciplinary Steering Committee for Economic Integration shall:

- Step up the implementation of “the Resolution of the fourth plenum of the XII^th Central Committee of the Communist Party of Vietnam on effective international economic integration and maintenance of socio-political stability in the context of Vietnam accession to new-generation free trade agreements” (Resolution No. 06-NQ/TW dated November 6, 2016). It shall urge the ministries and sectors to fulfill their tasks set forth in the Government’s program of action to implement Resolution No. 06-NQ/TW.

- Review regularly and ensure the strict implementation of the FTAs; promptly figure out problems and propose solutions in order to increase the effectiveness of the fulfillment of the FTA commitments and organization of dissemination of the FTAs and provision of support to enterprises and the people for effectively utilizing the FTAs.

- Operate smoothly and harmoniously the mechanism of coordination among the ministries, sectors and central units as well as cooperation with the focal points in charge of international economic integration in localities.

2. Ministries, ministerial-level agencies and government-attached agencies shall:

- Spare adequate resources for and prioritize the implementation of the FTAs and support related parties in effectively utilizing the FTAs already in force in their fields of management.

- Simplify the procedures and processes for processing administrative formalities, develop the single-window mechanism to reform the grant of licenses or permits for enterprises, shorten the time limit for licensing and reduce expenses for import or export and customs clearance of goods, thus facilitating goods trading and import-export activities.

- Coordinate closely and actively with the Ministry of Industry and Trade in reviewing and assessing the implementation, proposing solutions to implementing and taking advantage of the FTAs already in force, and studying and assessing the ability to get the best of the incentives for specific commodity groups.

- Continue formulating and improving the relevant law and policy systems to fulfill the FTA commitments according to the set roadmap;  ensure the consistency and effectiveness of the current legal documents with a view to maintaining the stability of the investment and business environment.

- Regularly review, amend, revise or annul regulations unconformable with the FTA commitments in order to fulfill the obligations under the bilateral, regional and multilateral treaties to which Vietnam is a contracting party.

- Proactively propose the Ministry of Industry and Trade to submit to the Prime Minister necessary measures to protect Vietnam’s rights and interests in case the FTAs are violated.

- Increase penalties and apply administrative sanctions against violators. To pay greater attention to the examination and supervision of the policy implementation.

- Coordinate with the Ministry of Industry and Trade in guiding and interpreting the FTA regulations in the fields and sectors under their charge for uniform application in case there are differences in the understanding and application of such regulations.

- Step up the dissemination of, provision of guidance on, and public communication for better awareness and knowledge of specialized units and cadres, localities and enterprises about, the international commitments relevant to them in order to ensure adequate and timely fulfillment thereof. It is necessary to provide guidelines and mechanisms for encouraging intellects and experts to participate in the study, analysis and assessment of effects of the international integration on Vietnam in short, medium and long term.

- Formulate policies and concretize measures to support enterprises in implementing the FTAs in conformity with their tasks and the measures set forth in “the Resolution on support for and development of enterprises through 2020” (Resolution No. 35/NQ-CP dated May 16, 2016).

- Increase the involvement of the people and enterprises in the law-making process in order to ensure their actions’ conformity with the international economic integration commitments and their own interests.

- Measure the competitiveness of their sectors in order to lay a foundation for formulating the plan to increase the competitiveness of the sectors with a competitive edge and regulate production activities of less competitive sectors and enterprises, with a view to maximizing the benefits from the FTAs; report to the Interdisciplinary Steering Committee for Economic Integration on results of the implementation of their assigned tasks on an annual basis or at the latter’s request.

In addition, each ministry or sector has to carry out the following works related to its fields of management:

a/ The Ministry of Industry and Trade shall:

- Proactively coordinate with related ministries, sectors, research institutes and agencies, associations and the Vietnam Chamber of Commerce and Industry in studying and evaluating how to make use of the incentives offered by the FTAs for each specific commodity group, mapping out activities of dissemination, encouraging and supporting Vietnamese enterprises to join more deeply in the regional value chains. 

- Proactively coordinate with other ministries and sectors in identifying problems faced by Vietnam and its partners in the course of implementation of the FTAs in order to propose solutions within the framework of the relevant FTAs.

- Proactively coordinate with other ministries and sectors in guiding and interpreting the FTA regulations for uniform application in case there are differences in the understanding and application of such regulations.

- Proactively study and apply non-tariff measures, such as technical barriers and trade safeguards allowed by the World Trade Organization and the FTAs to support and protect the legitimate interests of domestic sectors from the foreign products’ competition.

- Intensify, renew and diversify trade promotion activities; regularly update market and product information; seek for and expand goods sale and distribution channels; pay special attention to the partners in the current FTAs that can be expected to have positive effects on Vietnamese trade.

- Study and attach importance to the development of allied industries and improvement of quality of products and competitiveness of the economy in order to increase added value of exports.

- Assume the prime responsibility for, and coordinate with other ministries and related sectors and localities in, accelerating the dissemination and popularization of the FTA commitments, paying attention to the commitments regarding each specific commodity so that enterprises in the sector may have a thorough understanding of the commitments and regulations applicable to their products, particularly those for markets with high standards.

- Assume the prime responsibility for, and coordinate with other ministries and related sectors and provincial-level People’s Committees in, developing a website to introduce the FTA commitments to enterprises and provide them with information and guidance related to goods imported into and exported from the markets of partners that have FTAs with Vietnam; proactively coordinate with related agencies in FTA partners in providing each other with information about policy changes and warning possible cases of trade and investment disputes.

b/ The Ministry of Foreign Affairs shall:

- Assume the prime responsibility for closely monitoring regional and international political, security and economic developments, and Vietnam’s external relations in order to forecast and propose solutions to issues that may affect trade ties between Vietnam and its FTAs partners.

- Direct diplomatic missions in promptly providing information about the policies of the FTA partners and effectively supporting enterprises and attracting investment.

- Coordinate with the Ministry of Industry and Trade in case of necessity to negotiate with and urge the FTA partners to lift their trade barriers and anti-dumping, anti-subsidy and safeguard measures applied to Vietnamese exports and in the course of settlement of disputes, if any.

- Assume the prime responsibility for politically and diplomatically lobbying foreign countries to soon recognize Vietnam’s market economy status, thereby contributing to protecting the legitimate interests of domestic enterprises and employees.

c/ The Ministry of Planning and Investment shall:

- Assume the prime responsibility for, and coordinate with other ministries and sectors in, regularly reviewing the business and investment conditions to conform to the investment-related international treaties to which Vietnam is a contracting party.

- Coordinate with the Ministry of Justice in guiding the prevention and settlement of international investment disputes, ensuring lawful rights and interests of Vietnam.

d/ The Ministry of Finance shall:

- Assume the prime responsibility for fully implementing the taxation commitments and other financial commitments in the FTAs that have been signed and come into force.

- Step up the tax administration and customs reform in conformity with the international standards in the region such as the ASEAN-4 and others.

- Ensure appropriate annual financial sources for dissemination and popularization of knowledge about the signed FTAs as well as the study and assessment of level of utilization of the FTAs and solutions to increasing the effective utilization thereof.

dd/ The Ministry of Agriculture and Rural Development shall:

- Assume the prime responsibility for studying and assessing the practical production and export of agro-fishery products to the FTA partners and proposing solutions to restructuring the export agro-fishery-forestry products toward higher quality and value.

- Study and propose specific short- and long-term plans and solutions to support the agricultural sectors in coping with competition from import goods as soon as import duties are removed.

-  Follow up and update the regulations on food safety and fauna and flora quarantine imposed by the FTA partners before disseminating them among domestic enterprises and proposing responding actions.

- Formulate the system of standards on food safety and fauna and flora quarantine in conformity with the FTA commitments and relevant international standards in order to control the quality of imports.

e/ The Ministry of Science and Technology shall:

- Assume the prime responsibility for, and coordinate with related ministries and sectors in, intensifying the collection and study of international scientific and technological know-how for universal application to the production of good-quality exports.

- Assume the prime responsibility for, and coordinate with related ministries and sectors in, studying and applying measures for protection and enforcement of the intellectual property rights in order to promote the domestic scientific and technological research and development suitable to the country’s technological level and development orientation in the coming time and conformable with Vietnam’s international commitments.

- Coordinate closely with related ministries and sectors in implementing the law on intellectual property, intensifying international cooperation on protection and enforcement of the intellectual property rights.

- Proactively update technical solutions expected to be introduced and applied by the FTA partners for dissemination among domestic enterprises and specialized management agencies in order to come up with responding actions.

- Attach importance to increasing the capacity of conformity assessment organizations to meet the trend of integration under the conformity assessment commitments in the FTAs.

- Intensify the mutual recognition of conformity assessment results and recognition results between the international conformity assessment organizations and recognition organizations from the FTA member states in order to reduce the investment burden for the conformity assessment system of each state and create favorable conditions for import and export activities of organizations and enterprises (for instance, reduction of portage charges or customs clearance time).

g/ The Ministry of Transport shall:

Assume the prime responsibility for, and coordinate with related ministries and sectors in, further intensifying the transport linkage with ASEAN members and concerned FTA partners, thus facilitating enterprises’ cargo transportation.

h/ The Ministry of Information and Communications shall:

- Assume the prime responsibility for, and coordinate with the Ministry of Industry and Trade, Ministry of Planning and Investment, Ministry of Foreign Affairs and related ministries and sectors in, establishing an e-portal incorporating a general database to provide sufficient information about essential documents on international integration events.

- Coordinate with the Ministry of Industry and Trade and related ministries and sectors in formulating and implementing the program on propagandizing and introducing the signed FTAs to enterprises and the people, focusing on clarification of interests and obligations of enterprises and the people when Vietnam accedes to the FTAs.

- Direct the news and press agencies to coordinate with the Ministry of Industry and Trade and related ministries and sectors in carrying out public information and communication about the signed FTAs.

i/ The Ministry of Justice shall:

- Assume the prime responsibility for, and coordinate related ministries and sectors to, actively reviewing and proposing amendments, supplementations to, or annulment of, the Vietnamese regulations in line with Vietnam’s FTA commitments.

- Coordinate with related ministries and sectors in organizing the process of promulgation of legal documents and policies in accordance with the 2015 Law on Promulgation of Legal Documents; increase the participation of the people and enterprises in the process of formulating legal documents in conformity with the FTA commitments while guaranteeing domestic interests.

- Assume the prime responsibility for, and coordinate with related ministries and sectors in, intensifying the multilateral cooperation in the field of legislation, particularly the regulations on international trade and investment; proactively prevent and settle international investment disputes, ensuring lawful rights and interests of the Vietnamese Government.

k/ The Ministry of Natural Resources and Environment shall:

- Assume the prime responsibility for, and coordinate with related ministries, sectors and localities in, formulating mechanisms for coordination in the settlement of environmental problems arising in the process of international economic integration.

- Study, review and improve the system of environment-related standards and regulations toward harmony with the international standards and regulations in order to attract foreign investment and expand export markets for Vietnamese goods.

l/ The State Bank of Vietnam shall:

Continue implementing the monetary policies in a proactive and flexible manner and effectively managing banking activities closely combined with the fiscal policy and other policies in order to control inflation, contribute to stabilizing macro-economy, stabilize the banking system and financial market and conform to the international standards, economic development conditions, monetary market and monetary policy implementation framework of Vietnam and its FTA commitments.

3. Provincial-level People’s Committees shall:

- Plan and carry out the public information and dissemination of the FTAs to improve the awareness of local enterprises about international economic integration in general and the signed FTAs in particular, especially opportunities and challenges from the FTAs and how to take advantage of the FTA commitments in their business activities with foreign partners in suitability with special characteristics and socio-economic development conditions of their localities.

- Be alert to attitude of interest, readiness and production and export capacity of local enterprises in order to support them in grasping advantages and making the best of the FTAs; attaching importance to building the integration capacity and competitiveness of local enterprises; provide parts and spare parts to, and participate in production chains of, FDI enterprises under the FTAs; proactively make requests for assistance from the central level in solving local difficulties.

- Proactively promote cooperation relations, including the active negotiation, conclusion and effective and practical utilization of local-level economic-trade cooperation agreements with the FTA partners; and participate in the sub-region cooperation programs.

- Continue consolidating the organizational apparatus and increase knowledge and capacity of local cadres engaged in international economic integration work for making policies and realizing the international commitments.

4. The Vietnam Chamber of Commerce and Industry shall:

- Plan and effectively carry out the public information and dissemination of the FTAs and improve the awareness of member enterprises about the international economic integration in general and the signed FTAs in particular; guide and help the commodity line associations and enterprises become better aware of opportunities and challenges of the FTAs and how to take advantage and get the best of the FTA commitments in their business activities with foreign partners.

- Attach importance to building the integration capacity and competitiveness of member enterprises; proactively make requests for assistance from the governmental agencies in solving local difficulties.

- Proactively promote cooperation relations between the Vietnam Chamber of Commerce and Industry and the foreign partners in order to help member enterprises seek for potential partners and expand their business networks; and exchange information and experience in FTA utilization among the chambers of commerce and industry.

5. The Office of the Interdisciplinary Steering Committee for Economic Integration shall sum up the realities and report them to the Prime Minister and Deputy Prime Minister - Head of the Steering Committee on an annual basis or at the latter’s request.

6. Ministers, heads of ministerial-level agencies, heads of government-attached agencies and chairpersons of provincial-level People’s Committees shall organize strict implementation of this Directive.-

Prime Minister
NGUYEN XUAN PHUC