To maximize the advantage of export opportunities from free trade agreements (FTAs), enterprises cannot but take into account the criteria for sustainable development. This is not a barrier set up by partner countries to restrict imports, as thought by many people, but a support instead.
In the report “Our Common Future” by the United Nations’ World Council for Environment and Development (WCED), sustainable development is defined as “development which satisfies the current demands but does not obstruct meeting the demands of future generations.”
Sustainable development is a process with the close, reasonable and harmonious combination of three aspects: economic development, social development (implementing social progress and equality, narrowing the income gap, reducing poverty and solving employment) and environmental protection.
Sustainable development is the cross-cutting standpoint embraced by the Party and the State policies and has been integrated into 10-year socio-economic development strategies and five-year socio-economic development plans. Most recently, on September 25, 2020, the Government issued Resolution 136/CP-NQ on sustainable development.
Human is the core of sustainable development in FTAs
One of the guiding viewpoints of Resolution 136 is human is the core of sustainable development. This viewpoint can be seen in FTAs, especially the two new FTAs, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA).
With this viewpoint, two out of three pillars in the regulations in new generation FTAs are related to human, namely safe trade and socially responsible trade; the remaining pillar is free trade.
There are two regulations for safe trade related to the safety of human health, including technical barriers to trade (TBT) and sanitary and phytosanitary measures (SPS).
The TBT regulate the assessment of the compliance of imports with technical standards and criteria of importing countries which are applied to protect human health and safety and the environment.
The SPS are applied to protect the life and health of humans, animals and plants through ensuring food safety and preventing the penetration of diseases originating from animals and plants. They are requirements for quality, packing process, packaging, quarantine, sampling, and transport of animals and plants.
Irresponsible development to lose ground
According to some Vietnamese experts, the application of TBT and SPS is increasingly popular and more complex with higher and stricter requirements to protect domestic production and cause difficulties for imports. However, this is an indispensable and normal requirement of developed countries and the civilized, modern society to ensure health safety for consumers of the imported goods. Vietnam should approach this application with suitable steps and cannot do away with local consumers. The dual method of producing clean products for one’s own use and products containing chemicals and prohibited substances to increase productivity and optimize profit from sale to others is unacceptable not only to the international market in the context of Vietnam’s deep and extensive global integration but also to the domestic market.
Socially responsible trade concerns labor protection. The words “comprehensive and progressive” of the CPTPP express the full social responsibility of the agreement. For social progress and equality, everybody enjoys the fruits of development and no one is left behind. Goods must not be produced by forced labor and minor labor and under poor working conditions. Contents regarding labor and trade unions are also included to protect the legitimate rights and interests of workers.
Environmental protection covers treatment and rectification of pollution, restoration and improvement of the environmental quality, prevention and fighting deforestation, reasonable exploitation and economical use of natural resources, especially land, forests and the sea, and prevention of illegal exploitation.
The European Union (EU) has regulations for not only product standards but also the production process of such products. For instance, it forbids the use of illegally caught fisheries or timber exploited from natural forests without permission.
The EU issued a yellow card for illegal fishing in Vietnam effective since October 23, 2017, applicable to fisheries caught from the seas, not to products from aquaculture. According to the Vietnam Association of Seafood Exporters and Producers, the move is also an opportunity for Vietnam’s fisheries industry to review its current status, re-organize production and perfect the fishing management system towards sustainable development. Vietnam has exerted efforts to manage and supervise fisheries caught from the sea and raise fishermen’s awareness for legal compliance so that the EU can withdraw the yellow card to create conditions for Vietnamese fisheries to enter the EU market when the EVFTA took effect from August 1, 2020.
For forest products, Vietnam and the EU have signed the Voluntary Partnership Agreement (VPA) and the Forest Law Enforcement, Governance and Trade (FLEGT) Agreement. The two sides have implemented the agreements which have been effective since June 1, 2019.
Over the past years, quite a few shipments of Vietnamese foods, vegetables, fruits and seafood have been inspected due to failure to meet criteria for food hygiene and safety and have even been returned.
Vietnam is in the group of countries with many cases of products receiving warning and being returned from Europe because they have failed to meet the EU’s food hygiene and safety standards and contained substances exceeding the permissible levels or being banned for use.
Results of the CPTPP and EVFTA implementation
According to statistics of the Ministry of Industry and Trade, after a year of implementation of the CPTPP, in 2019, Vietnam’s exports to Canada reached US$3.86 billion, up 28.2% from 2018; to Mexico US$2.84 billion, up 26.8%; to Chile nearly US$1 billion, up 20.5%; and to Peru US$350 million, up 40%. Vietnam’s trade surplus with 10 CPTPP partners was nearly US$4 billion.
The EVFTA, which has been effective since early August, has brought initial benefits for enterprises. According to the ministry’s figures, in the first month of implementation of the agreement, exports to the EU reached US$277 million.
These achievements are thanks partly to the lifting of the tariff barriers by 27 EU members and 10 Pacific-Rim countries as committed, with many commodities enjoying the zero tariff, facilitating Vietnam’s exports to those countries. In addition, they are the fruits of efforts of Vietnamese enterprises to improve product quality, meet standards for good origins and TPT and SPS requirements, ensure safety for human health, implement social progress and equality and protect the environment. The implementation of FTAs, including new generation FTAs, has promoted sustainable development and enhanced the quality of development.
By Anh Thu