FREE TRADE AGREEMENTS: OPPORTUNITIES AND CHALLENGES Nick Thorpe May 27, 2016 http://vietnamnews.vn/thumbnail/450/2510-tang-truongxanh.jpg?url=storage/images/2015/10/21/2510-tang-truong-xanh.jpg
Overview Section 1: Vietnam s Economic Integration Section 2: Opportunities of Selected FTAs Section 3: Challenges of Free Trade
http://www.cariasean.org/wp-content/uploads/2014/03/vietnam-header.png VIETNAM S ECONOMIC INTEGRATION
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP Growth (%) Vietnam s GDP Real Growth Rate (1986-2015) 12 10 9.54 9.34 8 7.80 7.79 6.42 6.68 6 4 3.36 5.05 4.77 5.40 2 0 Year Source: International Monetary Fund
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Billions of USD Vietnam s International Trade in Goods 350 300 250 200 150 100 Total Trade Exports Imports 50 0 Year Source: General Statistics Office of Vietnam, and United Nations Comtrade
Vietnam s 15 Free Trade Agreements Source: VN Express International
Vietnam s 15 Free Trade Agreements Source: VN Express International
Billions of USD Vietnam s Trade with Major Partners 120 100 96.6 85.3 80 78.5 2010 68.7 2011 60 55.5 58.6 2012 50.1 2013 40 20 41.8 42.1 39.9 38.2 36.5 34.6 27.9 26.8 36.5 33.7 29.1 24.2 17.8 27.4 28.9 21.1 18.1 12.9 2014 0 TPP Countries China ASEAN European Union South Korea Trading Partner Source: General Statistics Office of Vietnam
OPPORTUNITIES OF FTAS Trans-Pacific Partnership EU-Vietnam Free Trade Agreement ASEAN Economic Community South Korea-Vietnam Free Trade Agreement
Trans-Pacific Partnership Represents 40% of global GDP and one-third of international trade Consists of one-quarter of global seafood trade and one-quarter of world s timber and pulp production Could accelerate Vietnam s domestic reforms and expand regional cooperation Could increase GDP by 10% and exports by 17% by 2030 (World Bank) Vietnam joins TPP talks TPP officials meet in Hanoi Negotiations conclude in Atlanta, USA Ratification process and implementation Nov. 2008 Sept. 2014 Oct. 2015 2015-2017
European Union Vietnam FTA First high-standard trade deal between the EU and a developing country Consists of 18 chapters, including Trade and Sustainable Development (Chapter 15) Could increase GDP by 15% and exports to the EU by 35% upon full implementation (European Chamber of Commerce) FTA talks begin Negotiations conclude in Brussels Deal likely to be signed Ratification process and entry into force June 2012 Dec. 2015 Late 2016 2017-2018
ASEAN Economic Community Creates a single market for goods, services, capital, and labor Population of 625 million and combined GDP of nearly US$2.8 trillion (2014) Could increase GDP in Vietnam by 14.5% and in ASEAN by 7.1% by 2025 (Asian Development Bank) ASEAN Free Trade Area created ASEAN Economic Blueprint adopted ASEAN leaders sign AEC AEC enters into force 1992 Nov. 2007 Nov. 2015 Dec. 2015
South Korea Vietnam FTA Fosters a closer relationship between a major trading partner and Vietnam s largest source of FDI Could boost bilateral trade to US$70 billion by 2020 (up from US$28.9 billion in 2014) Standard trade deal that does not mention environmental protection or other social issues Negotiations launched Negotiations concluded Deal signed Entry into force Aug. 2012 Dec. 2014 May 5, 2015 Dec. 20, 2015
http://www.anonsweden.se/wpcontent/uploads/2014/01/wl-tpp-cartoon.jpg CHALLENGES OF FREE TRADE
Legal and Environmental Challenges Effectively enforcing environmental laws and regulations, especially those regulating industries set to expand (i.e., textiles and apparel, footwear, and seafood) Adhering to the TPP and EVFTA s environmental and social standards Threats to governing in the public interest at the national and provincial levels, in particular due to Investor-State Dispute Settlement Middle-income trap, as mentioned in ActionAid report on EVFTA and free trade agreements Issues with land grabbing and land-use compensation at the local level
ISDS Encroaching on Environmental Policy Bilcon v. Canada May 2008: Bilcon launched a US$300 million ISDS case under NAFTA Claimed breaches of minimum standard of treatment, national treatment, and most favored nation March 2015: Tribunal ruled Canada violated minimum standard of treatment McKenzie v. Vietnam November 2010: Michael McKenzie of South Fork Company launched a $3.75 billion case under the U.S.-Vietnam Trade Relations Agreement December 2013: Tribunal agreed with Vietnam and ruled that the tribunal did not have jurisdiction in the case
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