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system. For example, CPTPP will put an end
to subsidies, discrimination, preferential loans,
and special access rights to public procurement
entitled to state-owned enterprises. This, in turn,
will force businesses to compete fairly and equally.
Therefore, state-owned retailing businesses must
work more proactively to survive and thrive.
It also acts as a driving force for businesses to
improve their capacity.
In addition to the abovementioned positive
impacts, Vietnamese retail market will also
face some challenges under the context of
implementing new generation FTAs as follows:
First,
according to commitments specified in
CPTPP and EVFTA, Vietnam must remove ENT
requirement for foreign retailers from member
countries after 5 years of the effective date.
This will possibly result in the penetration and
expansion under larger scale of foreign retailers
in Vietnam market, hence leading to the risk of
market dominance of foreign retailers.
Second,
with respect to sources of goods,
domestic goods will face the risk of being
replaced by imported goods. In the condition
that Vietnam has not developed adequate
and effective use of trade barriers, namely
TBT, SPS, or temporary trade remedies, to
protect the domestic market to a certain extent,
the participation in FTAs, particularly new
generationFTAs,willnegatively
impact the national growth as
well as the competitiveness of
Vietnamese products.
In short, the analysis of
commitments specified in
new generation FTAs has
revealed both positive and
negative impacts on Vietnam’s
market. It is noticeable that
the competitive pressure from
retailers of member countries
in new generation FTAs will
be significantly fiercer than
those from conventional FTAs.
However, the implementation
of these new generation FTAs
will offer Vietnam retail market
an opportunity to diverse the
supply sources, participate in
the global supply chain, and
develop a more competitive retail system; thereby
improvingtheallocationof resources, andboosting
social welfare. Especially those in relation with
the opening up of e-commerce market will have
positive influence on the supply of goods, which
will be more appealing and efficient for the retail
market. This once again gives a hope for a more
dynamic retail market when these FTAs come
into full force.
References:
1. Bui Truong Giang (2010), Vietnam economic policy and strategy for
approaching the Free Trade Agreement, Social Science Publisher, Ha Noi,
2010;
2. Bela A. Balassa (1961), The Theory of Economic Integration,
Homewood, Ill., R.D. Irwin, 1961;
3. Viner, J. (1950), The Customs Union Issues, New York: Carnegie
Endowment for International Peace;
4. WTO (2011), World trade Report 2011: The WTO and preferential trade
agreements: From co-existence to coherence;
6. The World Bank (2016), “How do “new generation” trade agreements
such as the TPP differ from traditional free trade agreements?”, Global
Weekly;
7. WTO Center, VCCI, AVR (2016), “Risks to Vietnam’s retail industry
in the context of TPP and FTA integration, status quo and policy
recommendations”, Policy Research, Ha Noi, December 2016;
8. Websites: blogs.worldbank.org, tinnhanhchungkhoan.vn,
thesaigontimes.vn, tapchibanle.org.
WTO
Vietnam – Korea
FTA
Vietnam – EACU
FTA
EVFTA
CPTPP
Commitments on
opening up of retail
market
Commitments on
opening up of market
for goods and issues
related to the circulation
of goods
Retail market
FIGURE 1: IMPACT CHANELS OF COMMITMENT GROUPS UNDER THE NEW
GENERATION FTAS AND AGREEMENTS TO THE VIETNAMESE RETAIL MARKET
Source: The authors
