27/06/2016
In the last 68 years, particularly in recent years in the 21st century, the globalization and international economic integration, within the World Trade Organisation (WTO) has made two revolutions. Firstly, the globalization of trade in goods has boomed the production and increased services globally. As a result, borders among countries have become “softer”, goods move faster with lower costs. Secondly, the globalization of trade in services has created the free movement of services among countries in the world with lowest cost and highest quality.
To achieve that, WTO has established the legal institutional system consisting 16 multinational agreements and 4 multi-partner (now only 2 left) on common issues of international trade applied by the whole world. However, WTO has not achieved such as the establishment of a multilateral agreement on environment, labour, etc. What is the reason?
This is because of the sensitivity of the trade and environment; therefore, up to now, within the legal regulations of WTO, there is no multilateral agreement on trade and environment.
However, in many agreements of WTO, there are provisions relating to trade and environment. Trade and environment in WTO’s agreements are illustrated in many provisions on standards of manufacturing and processing processes, regulations on labelling, environmental fees and payments for product’s export and import, etc. Moreover, recent changes in Doha Negotiation Round show that WTO is towards developing and finalizing a multilateral agreement on environment1.
In addition, in new generation free trade agreement (FTA) such as the Trans-Pacific Partnership Agreement (TPP), etc. trade and environment have been parts of the formal negotiation.
Therefore, whether want it or not, Việt Nam cannot or should not avoid the trade and environment in the international economic integration in general and in WTO in particular.
So, what are the impacts of commitments relating to trade and environment, as well as our opportunities and challenges?
General impacts:
By now, indirect commitments of Việt Nam for environmental issues relating to trade focus mainly on non-tariff barriers, particularly trade measures such as prohibition and restriction of export and import due to environmental protection reasons, human and animal health such as agreement on Technical Barriers on Trade (TBTs), Agreement on Sanitary and Phytosanitary (SPS) and some trade protection measures such as subsidies, local support, etc.
Basically, Việt Nam’s trade policy system is appropriate with WTO’s regulations. The implementation of international economic integration commitments of Việt Nam is appropriate with international regulations towards without creating barriers for trade, service and investment. Environmental policy measures to limit trade and investments that cause negative impacts on the environment which are based on scientific background, are measures that WTO allows to apply for environmental protection, to prevent natural resources scarcity, to protect human and animal health. Environment measures promote trade and investment activities without creating differential treatment.
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Fishery suffered most from environmental trade disputes |
However, issues confronting Việt Nam are: how should the integration policy be like to cope with environmental barriers for export goods and to make use of technical support to enhance the compliance with environmental regulations and standards in international trade?
If we do not actively study, participate and monitor the progress of WTO in general and the Doha negotiation round in particular, we may meet a lot of difficulties in exporting goods such as fishery, agriculture, wood, textile, shoes products. In addition, some environmental regulations can be applied in trade such as climate change, waste management, pesticide, biosafety... can also cause barriers to export goods of Việt Nam. In TPP, subsidies for fishery, illegal fishing capture, illegal forest exploitation, illegal wildlife trade... will cause substantial impacts to trade of Việt Nam.
Therefore, supposedly if Doha negotiation round finishes and WTO members agree on a multilateral environment agreement within the WTO, they will affect Việt Nam in following points:
Opportunities:
- The unification of a multilateral environment agreement within WTO will cause pressure for Việt Nam to have high awareness in meeting environmental standards at a higher level.
- Việt Nam, as a developing country, will receive support from developed countries in technical assistance programs and capacity building on trade and environment.
- Meeting environmental requirements, Việt Nam will have opportunities to expand exports, Việt Nam’s goods will have reputation in markets with strict environmental standards.
- Trade conflicts relating to environment are minimized as a result of the unification of environmental issues being considered in WTO agreements.
Difficulties:
- The requirements of compulsory environmental regulations will minimize the market access of Việt Nam’s export goods.
- Coping with trade conflicts relating to environment as Việt Nam’s enterprises have not met regulations and standards of import countries.
- The most affected sectors are fishery, textile, shoes, wood, agriculture products .
Recommendation, suggestion:
Based on above issues, as environment is new and very complex and there are a lot of arguments, Việt Nam is a developing country, so relevant agencies need to:
- Follow closely the progress of the Doha negotiation round on environment to prepare for the upcoming negotiation meetings: to be active in negotiation, at the same time to adjust trade and environment policies to be appropriate with negotiation results of this round.
- Study to give viewpoints of Việt Nam on whether environmental aspects should be part of a multilateral trade agreement: Việt Nam should support the establishment a multilateral agreement on environment trade within WTO. Because, currently, Việt Nam participates in almost all multilateral environment agreements and legalises almost all multilateral commitments on environment. Therefore, if multilateral commitments on environment and trade are institutionalized in provisions of WTO, Việt Nam will have advantages in addressing environment conflicts, such as nations apply trade measures for environment outside the sovereignty border, or be more advantageous in trading with WTO members who are not parties to international conventions on environment.
- Study the proposed lists of environment goods and services of other countries to propose our plans for these lists, to inform WTO Secretariat to prepare for the meeting of the Committee on Trade and Environment; Prepare the negotiation plan on reduction of tariff and non-tariff on environment goods and services for opening the market of environment services for committed sub-sectors at the same time to protect the benefits of environment services of Việt Nam.
- Study to propose viewpoints on environment issues in market opening: Việt Nam should support trends applying environmental measures in trade in order to minimise environmental pollution, global warming, and scarcity of natural resources. However, we should request WTO to have control mechanism so countries do not use above measures to protect trade. At the same time, we should not apply compulsory environmental standards such as manufacturing and processing standards, eco labels, and organic agriculture. Việt Nam needs to support supporting models for developing and less developing countries in environment program and harmonisation of environment standards.
- Việt Nam needs a stronger voice together with other developing countries, particularly with countries of high biodiversity to request changes in Provision 27 (2) and (3) of part 5 (Intellectual protection document) TRIPS agreement; Ask WTO to change towards equal benefit sharing in exploitation of traditional knowledge on hereditary and genetic resources, to be appropriate with the Convention on Biological Diversity (CBD); Mobilize countries including south countries rich in biodiversity to develop a strong and unified group to fight against the “invasion” of biology of developed countries.
- In remaining negotiations such as the negotiation on “rules”, services we will participate with the objective of observing, studying and proposing recommendations in areas affecting directly to Việt Nam’s rights such as the negotiation on revising the agreements on antidumping, proposing new regulations on fishery subsidies, self-defence on services, etc. In addition to negotiations, we will focus to gradually train staff to be familiar with multilateral trade negotiations.
- We need to be more active, but need to study carefully opportunities and challenges when participate in specific negotiation areas. The general situation is to participate in areas that we have benefits and avoid new commitments that cause difficulties to the economy.
Trịnh Minh Anh
Deputy Director of the Office of the Inter-sectoral Steering
Committee on International Integration on Economics
