REVIEW
of
FINANCE -
November, 2018
63
Vietnam – EACU FTA, CPTPP and EVFTA. These
FTAs are relatively comprehensive and covering
a diverse array of areas, including trade in goods,
rules of origin, trade remedies, trade in services,
investment, intellectual property, sanitary and
phytosanitary measures (SPS), technical barriers
to trade (TBT), e-commerce, competition, legal
and institutional matters.
Reviewing the New generation’s FTAs’
commitments on retailing reveals that in the
near future, retailing market and retailing
sector in Vietnam will be primarily impacted
by commitments under the framework of the
aforementioned agreements. The most directly
impacted commitments to Vietnam’s retail
sector include (i) commitment to open the retail
market, and (ii) commitment to open markets
for goods and services related to the circulation
of goods. Under the context of new generation
FTAs, Vietnam retail market is also affected by
commitments on e-commerce. This is a fairly new
topic which has rarely been mentioned in either
WTO Agreements or other conventional FTAs.
Nonetheless, within the past decade, e-commerce
has emerged as one of the most remarkable
issues in FTA negotiations, particularly in new
generation FTAs.
The milestone marking the opening of
Vietnam’s retail market is the commitments
to join the WTO in 2007. In parallel with the
WTO, Vietnam concurrently implemented other
commitments of bilateral and regional free trade
agreements, including Vietnam – South Korea
FTA, and Vietnam – Eurasian Customs Union
FTA. However, these FTAs were mainly about
trade in goods (the removal of tariff on imported
goods) while there was nothing different from
WTO commitments on services and retailing.
Thus, retailing sector has not been significantly
impacted by these FTAs. Currently, due to the
implementation of WTO commitments, Vietnam
has to open up the entire retail market for foreign
investors (in terms of legal presence and types
of operations), Vietnam can retain only two
types of barriers including (i) economic need
test (ENT), and (ii) seven groups commodities
that are prohibited from selling. Negotiation in
CPTPP and EVFTA on opening the retail market
in Vietnam is primarily focusing on the removal
of these two barriers at various degrees.
The duration in which Vietnam participated
in these agreements is not long. Therefore, the
authors mainly focus on potential impacts and
development risks in Vietnamese retail market
under the influence of new generation FTAs; and
analyze the most likely possible impacts on the
retail market.
Positive impacts
Firstly,
in terms of supply, the reduction
schedule of import tariff to 0% in new generation
FTAs is often shorter than that specified in
conventional FTAs; thus, it will create better
competitive advantages for retailers thanks to
lower prices of imports, and other benefits from
the removal of tariff barriers as well as other trade
facilitation and incentives. Another beneficial
aspect of new generation FTAs is that retailers
will be able to rebalance their supply source
structure by opening up to access to alternative
supply market.
Secondly,
regarding the possibility of joining
the global supply chain, new generation FTAs,
particularly in FTAs with multi-stakeholders
like EVFTA or CPTPP, offer opportunities for
Vietnamese retailers to take part in the global
supply chain. These FTAs open close partnerships
between businesses and member countries.
Thirdly,
new generation FTAs help filtering and
developing a more competitive retail business
TABLE 2: INTENTION TO PENETRATE AND EXPAND MARKET
OF SOME LARGE RETAILERS FROM NEXT GENERATION FTAS’
MEMBER COUNTRIES
Member
country Retailer
Plan
France Auchan
Open more than 40 outlets including
20 supermarkets, 20 mini marts and 2
hypermarkets by the end of 2018
Japan AEON
Open 20 shopping malls and
supermarkets by 2020
Open 500 mini marts by 2025
Open 800 convenience stores in the
future
Japan 7-Eleven Open the first store in August 2018
Open 1000 convenience stores by 2028
South
Korea Lotte - Open 60 shopping malls by 2020
South
Korea Emart - Open 52 supermarkets and
hypermarkets by 2020
Source: Compiled by the authors from various sources including
tapchibanle, saigontimes, tinnhanhchungkhoan, etc
