Trade
Time for Vietnam to get cracking on CPTPP reforms
Author: Nguyen Anh Duong, Central Institute for Economic Management
Following years of effort, in 2015 Vietnam concluded negotiations for the Trans-Pacific Partnership (TPP) trade deal. After the US withdrawal from the trade pact, Vietnam worked with the remaining members to revive it under the name of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Indeed, Vietnam was the seventh member to ratify the CPTPP.
Vietnam’s enthusiasm for the CPTPP stems largely from hopes it will induce further domestic reforms by aligning external pressure over domestic vested interests, an approach the country has relied on since 1986. The long process from negotiation to ratification has allowed Vietnam to build domestic institutional capacity in a number of regulatory areas, including around data flows, state-owned enterprises (SOEs) and intellectual property (IP).
Vietnam’s regulations on cross-border data flows have seen little change since the CPTPP’s entry into force in 2019, despite calls from the business community. The other signatories gave Vietnam five years to amend to the strict data localisation requirements from its 2018 Cybersecurity Law which are inconsistent with the CPTPP’s e-commerce chapter. Though Vietnam is yet to announce any upcoming legal changes, in practice the country may be less restrictive than it appears — in 2019 it ranked 7th globally in cross-border data flows.
SOE reform has also seen insufficient progress since 2019. Vietnam planned to equitise 127 SOEs from 2017–2020 but fell short by 54. Those that were equitised did see an improvement in operational efficiency, yet no material progress was reported for the SOE sector overall.
Changes to Vietnam’s IP protection regime have proceeded more rapidly. In 2019 the country amended its IP law to meet CPTPP commitments as per an agreed roadmap set out in the trade pact. Vietnam has now fulfilled commitments related to patent applications, geographical indication, enforcement and customs measures.
While the CPTPP only requires the establishment of an electronic trademark system, Vietnam went even further by making the system available for all kinds of IP rights. Vietnam has also drafted further legal amendments for National Assembly approval in 2022 aimed at addressing any remaining IP issues related to commitments made under the CPTPP.
Within Vietnam, there has been debate as to how swiftly reforms related to the CPTPP should have proceeded. Some experts on economic integration have called for an earlier and more radical phase in meeting Vietnam’s CPTPP commitments as part of a unilateral reform approach. But the pay-offs from such an approach were diminished by the US TPP withdrawal under former US President Donald Trump and the Biden administration’s apparent lack of enthusiasm for resurrecting the trade pact.
China’s application for CPTPP membership in September 2021 stirred up new discussion on whether Vietnam should take the CPTPP more seriously and could be another incentive for Vietnam to accelerate reform. Some experts have suggested China could meet the CPTPP standards if it can negotiate similar exemptions to those given to Vietnam under the pact. Still, had Vietnam been bolder in its SOE reforms to date, it might not have been named as an example of relaxed entry into the CPTPP.
Likewise, in terms of data flows, targeting the exemptions that Vietnam enjoyed under CPTPP would be a possibility for China. China’s application to join the Digital Economy Partnership Agreement between Singapore, Chile and New Zealand is another factor for consideration. If Vietnam was able to swiftly improve domestic regulations to facilitate cross-border data flows — at least in line with the CPTPP commitments —Vietnam could help preserve high standards of the CPTPP and eventually realise its aim of contributing to writing global trade rules.
Implementing the remaining IP commitments under the CPTPP is another complex task for Vietnamese regulators.
Making IP regulatory changes just in line with CPTPP commitments gives Vietnam some space in how to implement rules domestically and perhaps shape new rules in future trade negotiations. But as the IP commitments are phased in with a roadmap, a series of amendments to Vietnam’s IP law over time may only increase the changeability — instead of the adaptability — of its regulations. Vietnam may need a more concrete approach to IP policy given that in 2019 the country ranked only 19th among APEC member economies in the adaptability of its legal…
Trade
Self-Reliance and Openness: Core Principles of China’s Third Plenary Session
The Third Plenum communique from the CCP indicates a prioritization of stability and compromise in response to China’s economic challenges. It highlights the concept of Chinese-style modernization and establishes political guidelines for balancing regulation and market forces.
The CCP’s Third Plenum communique signals a focus on stability and compromise in the face of China’s economic challenges. It emphasises Chinese-style modernisation and sets political directions for balancing regulation and market forces. While not as groundbreaking as previous plenums, it acknowledges the importance of market mechanisms and technological self-reliance, aiming to address issues like high youth unemployment and private sector uncertainty. The communique seeks to navigate the complexities of global competition and domestic innovation, potentially reshaping global supply chains and trade dynamics. Overall, it presents a pragmatic blueprint for China’s economic future.
Source : Self-reliance and openness central pillars of China’s Third Plenum | East Asia Forum
Trade
Trade Prevails Over Political Persuasions in China-Germany Relations
China and Germany maintain a strong bilateral relationship, rooted in economic cooperation despite ideological differences. Recent visits and agreements focus on expanding trade and addressing mutual concerns, navigating challenges while nurturing ties.
Evolving Bilateral Ties
China and Germany share a strong bilateral relationship, rooted in history since 1972. This connection has seen moments of cooperation intertwined with periods of tension. German Chancellor Olaf Scholz’s April 2024 visit underscores Germany’s commitment to fostering this partnership, reflecting a mutual interest in maintaining economic ties despite ideological differences.
Economic Pragmatism
As the second and third largest global economies, China and Germany’s economic interdependence is crucial. Germany emerged as China’s primary trading partner in 2023, with trade values reaching €254.4 billion (US$280 billion). In response to global scrutiny, Germany has taken a balanced approach, emphasizing economic stability over political discord. This was evident during Scholz’s prior visit in November 2022, where his diplomatic tone contrasted with broader EU sentiments.
Facing Challenges Together
Despite increasing public skepticism in Germany regarding China’s global influence and human rights issues, both nations continue to seek common ground. Their October 2023 Joint Statement highlights intentions to pursue cooperation in areas like carbon neutrality and open markets. To navigate these complex terrains, Germany can utilize its institutional frameworks to enhance dialogue, while also considering supply chain diversification to reduce dependency on China. The intertwining nature of their economies suggests that, despite challenges, both countries will continue to prioritize their substantial trade relations.
Source : Trade trumps political persuasions in China–Germany relations
Trade
Fixing fragmentation in the settlement of international trade disputes
Fragmentation in global trade due to the lack of development in multilateral trade rules at the WTO has led to an increase in FTAs. The Appellate Body impasse has further exacerbated fragmentation, requiring a multilateral approach for reform.
Fragmentation in Global Trade
Fragmentation in global trade is not new. With the slow development of multilateral trade rules at the World Trade Organization (WTO), governments have turned to free trade agreements (FTAs). As of 2023, almost 600 bilateral and regional trade agreements have been notified to the WTO, leading to growing fragmentation in trade rules, business activities, and international relations. But until recently, trade dispute settlements have predominantly remained within the WTO.
Challenges with WTO Dispute Settlement
The demise of the Appellate Body increased fragmentation in both the interpretation and enforcement of trade law. A small number of WTO Members created the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) as a temporary solution, but in its current form, it cannot properly address fragmentation. Since its creation in 2020, the MPIA has only attracted 26 parties, and its rulings have not been consistent with previous decisions made by the Appellate Body, rendering WTO case law increasingly fragmented.
The Path Forward for Global Trade
Maintaining the integrity and predictability of the global trading system while reducing fragmentation requires restoring the WTO’s authority. At the 12th WTO Ministerial Conference in 2022, governments agreed to re-establish a functional dispute settlement system by 2024. Reaching a consensus will be difficult, and negotiations will take time. A critical mass-based, open plurilateral approach provides a viable alternative way to reform the appellate mechanism, as WTO Members are committed to reforming the dispute settlement system.
Source : Fixing fragmentation in the settlement of international trade disputes
- China’s November 2024 Economy: Navigating Mixed Signals and Ongoing Challenges
- Ukraine war: 10% of Chinese people are willing to boycott Russian goods over invasion – new study
- Australia Can Enhance China’s Credibility in the CPTPP
- Gordonstoun Severs Connections with Business Led by Individual Accused of Espionage for China
- China Dismantles Prominent Uyghur Business Landmark in Xinjiang – Shia Waves
- China Expands Nationwide Private Pension Scheme After Two-Year Pilot Program
