WT/REG406/2  
 
26 October 2021  
(21-8105) Page: 1/22 
Committee on Regional Trade Agreements  Original: English  
 
 
FREE TRADE AGREEMENT BETWEEN THE EUROPEAN UNION AND VIET NAM  
(GOODS AND SERVICES)  
QUESTIONS AND REPLIES  
 The following communication, dated 22 October  2021, is being circulated at the request of the 
delegations of  the European Union and Viet Nam . 
 
_______________  
 
 
Questions from Canada  
 
Characteristic elements of the agreement  
 
Background information  
 
1.1.  Paragraph 2.5 states:  "The Parties affirm the importance of cooperation and capacity 
building for the efficient implementation of the Agreement and commit to deepen 
cooperation in areas of mutual interest taking into consideration their different levels of 
development (Article  16.1). Cooperation shall foster inter alia, sustainable growth and the 
reduction of poverty. Article 16.2 lists areas for cooperation including trade facilitation, 
trade -related aspects of agriculture, fishery and forestry, environment, labour and small 
and medium sized enterprises (SMEs)."  
a. What types of cooperation activities will the EU and Viet  Nam undertake as part 
of the Cooperation and Capacity Building Chapter?  
Response from the Parties  
 
 The EU is funding a large cooperation programme in Viet  Nam, which encompasses many of 
the cooperation areas covered under Article 16.2.   
 On trade policy, Viet  Nam signed a Financing Agreement to implement the ARISE+ Trade 
Related Assistance Programme in 2018. The programme will run until the end of 2023 with a tot al 
budget of EUR 6.4 million. It includes a large technical assistance facility providing support to the 
Government of Viet  Nam in agriculture -related aspects of trade, the removal of technical barriers to 
trade and export promotion.  
 On forestry and trade  in timber products, the EU and Viet  Nam are working together on the 
implementation of EU -Viet Nam FLEGT Voluntary Partnership Agreement (VPA). Technical support 
to the VPA process comes from several sources: (1) Global EU -FAO FLEGT programme, implemented 
by FAO, provides grant support to government authorities, timber industry associations and 
non-state actors. The support mostly covers awareness raising capacity building along the 
negotiation and implementation, including the development of a timber legal ity assurance system 
(VNTLAS). (2) FLEGT -Asia regional programme which channels support from the European Forest 
Institutes (EFI). (3) Direct technical support through service contracts to help both EU and Viet  Nam 
during the  VNTLAS development.  WT/REG406/2  
 
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   Labour as pects of the EU -Viet Nam Free Trade Agreement also receive attention through 
reinforced cooperation with ILO. A specific Labour -related programme may also be included in the 
next 2021 -2027 cooperation programming cycle between the EU and Viet  Nam. 
b. Could th e parties please elaborate on which thematic elements will be explored?  
Response from the Parties  
 The ongoing ARISE+ Programme comprises 4 main components, namely SPS, TBT, Trade 
Policy supporting EVFTA implementation and Export Promotion.  
 SPS activities strengthen quality management systems in Viet  Nam, in particular the 
management of pesticide prod ucts with a view to comply with Maximum Residue Levels and enter 
the EU market. They include capacity building for laboratories involved in chemicals testing, the 
dissemination of good agricultural standards and residue monitoring programmes for products 
originated from fauna, flora and aquaculture. TBT/Quality Infrastructure activities provide capacity 
building for conformity assessment bodies towards accreditation and certification in selected export 
sectors. They foresee the dissemination of information on EU technical regulations and conformity 
assessment procedures to Vietnamese exporters. Export promotion activities currently focus on the 
development of a sustainable pepper supply chain – a commodity for which Viet  Nam is the main 
exporter globally. Ac tivities related to Trade Policy and the implementation of the EU -Viet Nam Free 
Trade Agreement are designed in a flexible manner and are demand driven. They include capacity 
building to implement regulatory improvements in line with previous legal reviews /recommendations 
and support for the formation of Domestic Advisory Groups involved in the monitoring of the Trade 
and Sustainable Development Chapter of the Agreement.  
 On FLEGT, Viet Nam is currently working on the required VNTLAS trough new and additio nal 
pieces of legislation, capacity building involving all stakeholders, from public authorities, to business 
and civil society. Both sides are analysing the progress, including the identification of gaps still 
existing between the VPA and Vietnamese law, in order to reach the full deployment of the VPA.  
 On the labour aspects of Trade and Sustainable Development, the ratification of fundamental 
ILO Conventions has received attention in the context of the Trade for Decent Work Project, 
implemented by ILO. V iet Nam ratified Convention 98 (on the right to organise and collective 
bargaining) in 2019 and Convention 105 (on forced labour) in 2020.  The government as an executive 
branch is studying Convention 87 with a target to submit to the National Assembly for ratifying in 
2021.  Labour is also central in sector specific cooperation activities, notably in the fishing industry 
under the regional Ship to Shore Project. Since 2020, Viet  Nam has been a beneficiary of this EUR 
10 million project , which strengthens the  regulatory frameworks related to labour migration and 
labour standards in the fishing and seafood processing sectors in South East Asia.  
c. Has consideration been given to cooperation activities focused on SMEs owned 
by under -represented groups such as women ? 
Response from the Parties  
 As the EU -Viet Nam Free Trade Agreement made doing bus iness easier and reduced export -
related costs, the SMEs are important beneficiaries of this trade agreement.  Provisions to support 
SMEs are included across the agreement (si mplification of procedures, chapter on transparency, 
regulatory cooperation). SMEs can greatly benefit from removing customs duties, simplified rules, 
enhanced transparency, making it easier to bid for contracts, elimination of TBTs, strengthening IPR 
protection, etc.  
 Viet Nam is currently a beneficiary of the EU -funded Project "Promoting economic 
empowerment of women at work in Asia " implemented from 2019 to 2022 by UNWOMEN with a total 
budget of EUR 8 million. The project seeks to  improve competitiveness for women -owned SMEs 
through training courses on soft skills , enhance the role and influence of women -owned businesses 
and entrepreneurs in policies and dialogue for the advancement of women 's economic empowerment 
in selected countries in A sia. 
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  Scope and definitions  
 
1.2.  Paragraph 4.3 states: "Provisions in Section B apply to measures of the Parties 
affecting establishment in all economic activities except audio -visual services, mining, 
manufacturing and processing of nuclear materials, product ion of, or trade in, arms, 
munitions and war material, national maritime cabotage and domestic and international 
air transport services and services directly related to the exercise of traffic rights other 
than aircraft repair and maintenance services duri ng which the aircraft is withdrawn from 
service, selling and marketing of air transport services, computer reservation system 
services and ground handling services, and services supplied and activities performed in 
the exercise of governmental authority (A rticle 8.3)."  
 Could the Parties confirm whether there are any instances in which, when a Party 
establishes a fully incorporated commercial presence in the maritime sector of the other 
Party, it is permitted to engage in domestic marine transport (i.e. mar ine cabotage)?  
 
Response from the European Union  
 National maritime cabotage is excluded from the scope of the EU -Viet Nam F ree Trade 
Agreement.  As such establishing a commercial presence in the EU does not entitle an operator of 
the other Party to engage in this kind of transport in the EU. While some European Member States 
may allow vessels with non -European flags to perform national maritime ca botage, this is a 
discretionary decision that is not bound under the Agreement.  
 
1.3.  Article 8.13 of the Agreement provides: "This Section applies to measures of a Party 
concerning the entry and temporary stay in its territory of business visitors, intra -
corporate -transferees, business sellers, contractual service suppliers and independent 
professionals."   
The category of business visitors is not defined in the Agreement, while the categories of 
business visitor for establishment purposes and business sellers are both defined and 
used throughout the Chapter.  
 
a. Is the term "business visitor" used interchan geably with the term "business 
visitor for establishment purposes" under the Agreement, including, for example, 
in Article 8.13?  
Response from the Parties  
 Yes, the se terms  are used interchangeably. The "business visitors " in the chapeau to article, 
as wel l as in the title and the first paragraph of Article 8.14 refer to "business visitors for 
establishment purposes ". 
b. Could the Parties please elaborate on the rationale to include the business seller 
category? Is there an overlap with activities that coul d also be covered under the 
business visitor category and the business seller category?  
Response from the Parties  
 "Business sellers " are distinct from "business visitors for establishment purposes ". "Business 
visitors for establishment purposes " are linke d to a (prospective) investment. "Business sellers " are 
engaged in selling goods or services. "Business sellers " should be seen as a category similar to the 
"service sellers " encountered in for example the EU 's GATS schedule, but with a broader sectoral 
scope (selling goods or services, rather than only services).  WT/REG406/2  
 
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  Transport services  
 
1.4.  Paragraph 4.37 states: "The EU takes no commitments for inland waterways 
transport."  
Paragraph 4.53 states:  "While Viet Nam has some commitments on internal waterway s 
transport in the GATS, it did not include any under the Agreement."  
 
 Could the Parties elaborate on the rationale for excluding Internal Waterways 
Transport Services from their respective schedule of commitments for this Agreement, 
recognizing that this  area is listed with partial commitments in the GATS schedule for both 
the European Union and Viet Nam?  
 
Response from the European Union  
 The EU has extremely limited GATS commitments for inland waterway transport. The choice 
not to take commitments in this Agreement reflects this very limited level of commitment and  is in 
line with the EU 's recent treaty practice . 
1.5.  Paragraph 4.51 states: "While, under the GATS, mode 1 for maritime transport 
services is unbound, except for international fre ight transportation, under the Agreement, 
Viet Nam maintains no limitations for modes 1 and 2 except for maritime auxiliary 
services. In mode 3, Viet Nam increased the foreign equity cap from 49% under the GATS 
to 70% under the Agreement for passengers and  freight maritime 
transportation.  Moreover, it made new commitments in maintenance and repair of 
vessels, maritime agency services and container station and depot services."  
 Is Viet Nam considering extending the increased foreign equity cap for passengers  
and freight maritime transportation (i.e. from 49% to 70%) to other trading partners with 
which it has a free trade agreement with Most -Favoured Nation obligations for 
investment?  
 
No response provided by Viet Nam  
 
Subsidies  
 
1.6.  Paragraph 4.57 states: "Section B of Chapter 10 applies to specific subsidies to 
enterprises supplying both goods and services except sectors or sub -sectors which the 
Parties have not listed in Chapter 8 (Article 10.5). Article 10.7 (transparency) and 
Article 10.9 (specific subsidies subject to conditions) apply only to the following services 
sectors: telecommunications, banking, insurance, transport including maritime transport, 
energy, computer services, architecture and engineering, and construction and 
environmental services, subject to the reservations provided for in Chapter 8."  
 Could the Parties elaborate on how the reservations provided for in Chapter 8 of the 
Agreement would be taken into account when implementing the obligations in Article 10.7 
(transparency) and Article 10.9 (specific subsidies subject to conditions) for subsidies in 
the listed services sectors?  
 
Response from the Parties  
 Section B of Chapter 10 does not apply to the sectors or sub -sectors not listed in Chapter 8. 
As a result, th e provisions concerning transparency (Article 10.7) and subsidies subject to conditions 
(Article 10.9) do not apply to subsidies granted to those sectors or sub -sectors. In addition, by virtue 
of Article 10.5.8, Articles 10.7 and 10.9 only apply to the ser vice sectors listed therein.  
State -owned enterprises and designated monopolies  
 
1.7.  Paragraph 5.61 states: "The laws and regulations of the Parties governing their 
systems of state ownership shall not be affected by Chapter 11 which does not prevent WT/REG406/2  
 
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  the Partie s from establishing or maintaining SOEs, granting enterprises special rights or 
privileges, or designating or maintaining monopolies (Article 11.3)."  
Article 11.3.1 appears to suggest that the domestic laws and regulations governing each 
Party's systems of state ownership may take precedence over certain provisions of the 
free trade agreement.  
 
 Could the Parties please clarify how they would address a conflict between 
Article  11.4 (Non -Discrimination and Commercial Considerations) or Article 11.5  
(Regulatory Framework) with "the laws and regulations of a Party governing its systems 
of state ownership"?  
 
Response from the European Union  
 The provisions of Chapter 11 do not prevent the parties from establishing or maintaining SOEs. 
Chapter 11 impose s disciplines on the behaviour of such entities, notably by the disciplines on 
commercial considerations and non -discrimination.  
 
1.8.  Paragraph 5.62 states: "Each Party shall ensure that in their commercial activities 
SOEs, enterprises granted special rights or privileges, and designated monopolies, in their 
purchases or sales of goods or services, act in accordance with commercial 
considerations, except to fulfil their public mandate, and that they do not discriminate 
[sic] the enterprises of the other  Party supplying or purchasing goods or services 
(Article  11.4)."  
Enterprises granted special rights or privileges, and designated monopolies, commonly 
exercise significant market power. In acknowledgement of this, GATT Article XVII applies 
whenever enterp rises granted exclusive or special privileges by a State make purchases 
or sales involving either imports or exports. Similarly, GATS Article VIII applies whenever 
a monopoly service is supplied in the relevant market.  
 
 Could the Parties please clarify wh y Article 11.4.1 only applies to the commercial 
activities of enterprises granted special rights or privileges, and designated monopolies, 
thus excluding certain activities that might not qualify as "commercial activities"?  
 
Response from the European Uni on 
 The aim of the provisions is to prevent competition distortions in the markets. Non -commercial 
activities do not raise significant competition concerns, and due to their non -commercial nature could 
not be bound by a discipline of commercial considerati ons.  
 
Labour  
 
1.9.  Paragraph 5.80 states: " The Parties commit to enhance the contribution of trade and 
investment to the goal of sustainable development in its economic, social and 
environmental dimensions (Article 13.10). To that end, they encourage greater policy 
coherence between trade and labour policies, and the development of and participation in 
voluntary initiatives that contribute to the achievement and maintenance of high levels of 
labour protection such as fair and ethical trade schemes and agree to, in accordance with 
their domestic laws and policies, promote corporate social responsibility including 
education and training activities and technical advice. " 
a. Are there specific activities or areas of focus that the EU and Viet  Nam work on 
as pa rt of their commitment to promote corporate social responsibility under the 
Trade and Sustainable Development Chapter?  
Response from the Parties  
 
 The focus areas within corporate social responsibility follows from the Agreement 
(Art. 13.10(e)) and the ref erenced international instruments, which are focused on the areas of 
human and social rights. In support of these commitments, the EU -financed ILO -run project "Trade 
for Decent Work" (link) includes activities in Viet Nam  in support of reinforced implement ation of WT/REG406/2  
 
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  international labour standards, indirectly supporting the effective use of the "ILO Tripartite 
Declaration of Principles concerning Multinational Enterprises and Social Policy".  
 
b. Has consideration been given to activities focused on education, tra ining 
activities or technical advice for SMEs, including those owned by under -
represented groups such as women and Indigenous peoples, on corporate social 
responsibility?  
Response from the Parties  
 
 In the context of the implementation of the EU -Viet Nam F ree Trade Agreement, dedicated 
attention is devoted to SMEs, including those led by women. An upcoming new supportive tool is 
under preparation, which will provide free of charge online guidance for all types of SMEs. The 
consideration to specific actions on CSR will be given in the course of the  implementation of the 
Trade and Sustainable Development chapter of the Agreement.  
 
Question s from China  
 
1.10.   The EU and Viet  Nam have established an annual ministerial trade committee 
mechanism to monitor and evaluate the implementation of the Agreement. It is reported  
that the first ministerial meeting was held in July 2021. How do the parties evaluate the 
effect of the EVFTA si nce its entry into force? Which sector ha s record ed rapid growth?  
Response from the Parties  
 
The first EU -Viet Nam Trade Committee was held on 19 July 2021.  
 
The Parties evaluate the state of implementation of the Agreement by having regular contacts, 
in addition to holding the specialized Committees established under the EU -Viet Nam FTA.  
 
 In accordance to the Agreement, the Parties have to exchange annual import statistics for the 
previous year.  
 
Since the entry into force of the agreement, the Parties ha ve recorded a general increasing 
trend in trade exchanges.  
 
1.11.   Could Viet  Nam introduce the differences of the liberalization level between the 
EVFTA and other FTAs signed by Viet  Nam, such as CPTPP?  
Response from Viet Nam  
 
The EVFTA and CPTPP are Viet Nam's first two new generation FTAs which basically have high 
standards with wide range of sectors and in -depth commitments. However, for each trading partner, 
Viet Nam has its own obligations and preferential treatments based on variety of factors. In terms 
of sectoral comparison, each chapter in EVFTA has different content and level of commitment than 
the respective one in the CPTPP.  
 
1.12.   It is understood  that the EU -Viet Nam Investment Protection Agreement and EVFTA 
are negotiated and signed at the same time, and both Agreements have investment -
related contents.  
 Could the Parties introduce how EVFTA interacts or coordinates with EVIPA with 
respect to investment -related contents?  
Response from the Parties  
 Both agreements have been negotiated together as a pac kage on investment and tra de. They 
are complementary and inter -linked. The FTA includes ambitious market access and liberalisation 
commitments on FDI. The investment protection agreement will protect the assets of EU investors 
in Viet Nam  and Vietnamese in vestors in the EU.  Together these agreements create an investment 
friendly environment between the EU and Viet Nam  that would be conducive to further growth.  
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  Rules of origin  
1.13.   Regarding  Rules of Origin,  paragraph  3.26 of the Report introduces that specific  
materials originating in an ASEAN country which is applying a preferential agreement with 
the EU, shall be considered as originating in Viet Nam  under certain circumstances.  
 What is the basis and consideration for the Parties  to establish  this specific rule?  
Response from the European Union  
 The provision aims at supporting the economic integration in the ASEAN region. This provision 
is limited to materials listed in Annex III. As stipulated in Article 3, paragraph 3 of the EU -Viet Nam 
FTA, the applicable rules of origin for such materials shall be determined in the framework of the 
FTA of that ASEAN country with the EU.  
Questions from Japan  
 
Provisions on trade in goods 
 
Rules of origin  
 
1.14.   Paragraph 3.26 of the report describes "Fabrics originating in the Republic of Korea 
shall also be considered as originating in Viet Nam when further processed or 
incorporated into one of the products listed in Annex V obtained in Vie t Nam, provided 
that they have undergone working or processing in Viet Nam which goes beyond the 
operations referred to in Article 6."  
 Are there any specific arrangements for administrative cooperation among EU, 
Viet Nam and Korea in order to carry out s ubsequent verification of the origin of "Fabrics 
originating in the Republic of Korea which is considered as originating in Viet Nam" 
referred to in Paragraph 3.26?  
 
Response from the European Union  
 
 Indeed, the necessary arrangements for administrative cooperation, including verification, 
have been in place since 23 December 2020.  
1.15.   Regarding Paragraph 3.28, the Paragraph 1 of the Article 30 of PROTOCOL 1 in the 
Agreement stipulates that " Subsequent verifications of proofs of origin shall be  carried 
out at random or whenever the competent authorities of importing Party have reasonable 
doubts ." It gives rise to questions whether the competent authorities of the importing 
Party select the verification target by random sampling simply or using r andom sampling 
after selecting based on some standard of screening.  
a. It would be greatly appreciated if you could explain the details including whether 
the competent authorities use some standards for screening or not.  
Response from the European Union  
 
 In the case of the EU, the controls on the grounds of reasonable doubts are based on risk 
analysis. The relevant legal provision for selecting transactions to be verified is Article 36 of the 
Implementing Act of the Union Customs Code, Regulation (EU) 2015/2 447.  
 
b. Furthermore, what kind of the standard do the importing Parties set specifically 
in order to decide if there are reasonable doubts?  
Response from the European Union  
 
 The risks analysis criteria are determined independently by each Parties. For the EU, the 
information is shared between all EU Member States and is obviously not public.  WT/REG406/2  
 
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  1.16.   Regarding Paragraph 3.28, the Article 33 of PROTOCOL 1 in the Agreement 
stipulates that " Each Party shall maintain, in accordance with its law, the confidentiality 
of information and data collected in the process of verification ".  
 It would be greatly appreciated if Parties could explain details on the laws and 
regulations that Parties comply with as mentioned in the Agreement.  
 
Response from the European Union  
 In the case of the EU, the relevant regulation is the General Data Protection Regulation (GDPR) 
Regulation 2016/679.  
Question s from Kazakhstan  
 
Regulatory provisions on trade in goods  
Safeguard mechanisms  
 
Global safeguards  
 
1.17.   Paragraph 3.50 notes that Article 3.7 of the Agreement contains provisions on 
transparency issues. Would you please explain how the mechanism for ensuring 
transparency in the application of safeguard mechanism will be implemented?  
Response from the Parties  
 
 In order to ensure tran sparency, Article 3.6.1 of the EU -Viet Nam Agreement affirms the 
Parties ' rights and obligations of the Safeguards Agreement, including the provisions on 
transparency. The additional provisions specified in Article 3.7.1 of the Agreement, establish that a 
Party initiating a global safeguard investigation or intending to impose global safeguard measures 
shall immediately provide ad hoc  written notification to Parties having a substantial interest that 
request such notification. This notification shall includ e all pertinent information leading to the 
initiation of an investigation and the proposal to impose measures, including the provisional findings 
where relevant.  
 
Sector -specific provisions on trade in goods  
 
Pharmaceuticals  
 
1.18.   In accordance with Article 2.15 of the Agreement, Viet  Nam has undertaken to 
adopt appropriate legal documents allowing foreign pharmaceutical companies to 
establish enterprises foreign -invested enterprises for the purposes of importing 
pharmaceuticals that have obtained mar keting authorization from Viet Nam's competent 
authorities.  
a. Please explain why this commitment was made only in relation to Viet Nam?  
Response from the Parties  
 
 Each Free Trade Agreement is the result of negotiations between the EU and the country with 
which it is concluded. This is the result of negotiations between the two sides based on mutual 
interests and balance of considered factors  
 
b. Do the EU countries have similar norms in the current legislation that allow 
Vietnamese pharmaceutical companies to  create enterprises with foreign 
investment to import their pharmaceutical products on the territory of the EU 
countries?  
Response from the Parties  
 
 There are no specific EU norms aimed at impeding such possibility.  
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  Liberalization commitments  
 
European Union  
 
Sector  specific  commitments  
 
1.19.   Despite the fact that within the framework of the GATS, the EU has made 
commitments for inland waterways transport, and Viet  Nam – for audiovisual services, 
these sectors are excluded from the Agreement.  
 Pleas e explain why these service sectors are not covered by the Agreement?  
Response from the Parties  
 The EU has extremely limited GATS commitments for inland waterway transport. The choice 
not to take commitments in this Agreement reflects this very limited le vel of commitment and is in 
line with the EU 's recent treaty practice.  
The scope of the Chapter 8 and the Agreement in general reflects balanced outcome of 
negotiations in which interests of both sides are ensured. Furthermore, WTO members still benefit 
from Viet Nam's specific commitments under GATS.  
1.20.   In connection with the UK's withdrawal from the EU, how will this Agreement apply 
to the UK?  
Response from the European Union  
 
 Since the UK withdrawal from the EU, the EU -Viet Nam Agreements binds Viet Nam and the 
27 EU Member States.   
 
Question s from the Philippines  
 
Characteristic elements of the agreement  
 
1.21.   Paragraph 2.5: The Parties affirm the importance of cooperation and capacity 
building for the efficient implementation of the  Agreement and commit to deepen 
cooperation in areas of mutual interest taking into consideration their different levels of 
development (Article 16.1). Cooperation shall foster inter alia , sustainable growth and the 
reduction of poverty. Article 16.2 lists areas for cooperation including trade facilitation, 
trade -related aspects of agriculture, fishery and forestry, environment, labour and small 
and medium sized enterprises (SMEs).  
 How did the EU and Viet Nam take into consideration their different le vels of 
development in negotiating the concessions agreed upon and the nature and/or extent of 
cooperation in mutual areas of interest? Which areas of cooperation identified in the FTA 
have been prioritized since entry into force, and will most likely be p rioritized going 
forward, especially in view of the COVID -19 pandemic?  
 
Response from the Parties  
 The different levels of developments are systematically taken into account when deepening 
co-operation in areas mutual interest.  Activities  related to Trade Policy and the implementation of 
the EU -Viet Nam Free Trade Agreement are designed in a flexible manner and are demand driven.  
 Cooperation encompasses many of the cooperation areas covered under Article 1 6.2 of the 
Agreement.  
 
 On trade policy, programme s include a large technical assistance facility providing support to 
the Government of Viet Nam  in agriculture related aspects of trade, the removal of technical barriers 
to trade and export promotion.  WT/REG406/2  
 
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   On forestry and trade in timber products, the EU and Viet Nam are working together in the 
implementation of EU -Viet Nam FLEGT Voluntary Partnership Agreement (VPA).  
 
 Labour aspects of the EU -Viet Nam Free Trade Agreement also receive attention through 
reinforced cooperation with ILO . 
 
Provisions on trade in goods  
 
Liberalization schedule  
 
European Union  
 
1.22.   Paragraph 3.15: Table 3.1 shows the tariff and trade elimination commitments by 
the EU under the Agreement. In 2020, 2,522 lines were duty free on an MFN basis, 
representing 26.6% of th e EU's total tariff, and corresponding to 65% of its imports from 
Viet Nam during 2017 -2019. Moreover, the EU grants preferential duty free access to 
imports from Viet Nam on 2,890 additional lines (30.5% of the tariff) under its generalized 
system of pref erences (GSP) programme. Following the entry into force of the Agreement, 
an additional 2,551 lines (26.9% of the tariff) became duty -free for imports from Viet 
Nam. By 2023, 598 additional lines will be liberalized bringing the total percentage of 
duty-free tariff lines to 90.3% corresponding to more than 89% of imports from Viet Nam 
in 2017 -2019. Finally, 816 tariff lines (10.7% of imports) will become duty free by 2027 
while 106 lines will remain subject to TRQs or the specific duty resulting from the en try 
price system at the end of implementation.  
 How was the transition from having Viet Nam as a beneficiary of EU GSP to Viet Nam 
as an FTA partner? What adjustments were made in terms of market access? Further, in 
the one (1) year since the entry into fo rce of the FTA, how did Viet Nam 's exportation to 
EU improve vis-à-vis exportation under the EU GSP?  
 
No response provided by Viet Nam  
 
Rules of origin  
 
1.23.   Paragraph 3.26: Article 3 provides for cumulation of origin. Products shall be 
considered as originating in a Party if they are obtained there by incorporating materials 
originating in the other Party provided that they have undergone working or processing  
in the exporting Party which goes beyond the operations referred to in Article 6. Moreover, 
materials listed in Annex III originating in an ASEAN country which is applying a 
preferential agreement with the EU, shall be considered as originating in Viet Na m 
provided that they are further processed or incorporated into one of the products listed in 
Annex IV. As of the date of this factual presentation, no ASEAN country is benefiting from 
such treatment. Fabrics originating in the Republic of Korea shall also  be considered as 
originating in Viet Nam when further processed or incorporated into one of the products 
listed in Annex V obtained in Viet Nam, provided that they have undergone working or 
processing in Viet Nam which goes beyond the operations referred to in Article 6. At the 
request of a Party, the Committee on Customs may decide that the cumulation for fabrics 
can be extended to a third party with which the EU and Viet Nam have a regional trade 
agreement.  
a. How do both parties intend to benefit from suc h extended cumulation treatment? 
Noting that no ASEAN country is benefitting from the same, are there any 
products specifically targeted in the provision of this arrangement in the FTA?  
Response from the European Union  
 
 The possibility foreseen under Arti cle 3.12 of the EU -Viet Nam FTA targets fabrics in general, 
when further incorporated into products listed in Annex V.  
 
 
 WT/REG406/2  
 
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  b. Are there any third parties that signified their interest in submitting a cumulation 
request? What are the Committee's conditions to favorably consider a cumulation 
request? What factors will an interested party has to consider for the Parties to 
approve a cumulation request?  
Response from the European Union  
 
 Not at the date of drafting the reply.  
 
c. How long does it take for the Committee on Customs to review the cumulation 
request?  
Response from the European Union  
 
 The Committee on Customs can review a potential request in a reasonable time, depending 
on the domestic procedures of the EU and Viet Nam. Without a request at hand i t is difficult to 
estimate the length of such a procedure.  
 
Sanitary and phytosanitary measures  
 
1.24.   Paragraph 3.36: Import requirements and procedures are set out in Article 6.6. 
Each Party shall adopt only measures that are scientifically justified, consistent with the 
risk involved and that represent the least restrictive measures available and result in 
minimum impediment to trade. The importing Party shall ensure that its import 
requirements and procedures are applied in a proportional and non -discriminatory 
manner and it shall ensure full transparency of its import requirements and procedures. 
The im port procedures shall aim at minimising negative trade effects and expedite the 
clearance process while complying with the importing Party's requirements and 
procedures. The exporting Party shall ensure compliance with the import requirements of 
the import ing Party. Each Party shall establish and update lists of regulated pests, using 
scientific terminology, and make such lists available to the other Party . Phytosanitary 
import requirements shall be restricted to measures ensuring the respect for the 
approp riate level of protection of the importing Party and limited to the regulated pests 
of concern to the importing Party. A Party has the right to carry out import checks based 
on the SPS risk associated with such imports and it shall make available the infor mation 
about the frequency of such import checks. Finally, any fees imposed for the procedures 
for imported products shall be equitable in relation to any fees charged for like domestic 
products and shall not be higher than the actual cost of the service.  
 What is the frequency of the updating of said lists and rationale thereof?  
 
Response from the European Union  
 
 The EU normally updates the list of regulated plants and commodities around every two years, 
by amending Regulation 2019/2072. The list is part of an EU Regulation, which means that it is 
always publicly available in its consolidated versions.  
 The rationale behind the update of the list is the assessment of new scientific evidence during 
working groups between the Commission and Member States , which is subsequently endorsed so 
called Plants, Animals, Food and Feed  committees with the agreement on the legislative changes . 
Bilateral safeguards  
 
1.25.   Paragraph 3.55: Bilateral safeguards cannot be applied for a period longer than two 
years, extendable by u p to two years, if the competent authorities of the importing Party 
determine that the measure continues to be necessary.  
 
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   What parameters can be considered in the determination of the extension of 
bilateral safeguards, and can a party apply for the extension of safeguard measure more 
than once within the transition period which is 10 years from the entry into force of the 
Agreement?  
 
Response from the Parties  
 
 In order to extend a bilateral safeguard measure, the authorities of the importing party need 
to determine that the measure continues to be necessary to prevent or remedy serious injury and 
to facilitate adjustment and also that there is evidence that the industry is adjusting. The parameters 
that need to be considered in the d etermination of the extension of a bilateral safeguard measure, 
according to Article 3.11.6 (b) of the EU -Viet Nam  FTA, are the conditions specified in Article 3.11 
of the EU -Viet Nam FTA, which include Article 3 and subparagraph 2(c) and 2(a) of Article 4  of the 
WTO Safeguards Agreement. The investigating authority shall also demonstrate the existence of a 
causal link between increased imports and serious injury or threat thereof and take into 
consideration the existence of any factor other than increased imports which may also cause injury 
at the same time. Bilateral safeguard measures can be extended more than once as long as the total 
period of application does not exceed four years (Article 3.11.6(b) of the EU -Viet Nam FTA).  
 
1.26.   Paragraph 3.56: In critical  circumstances where delay would cause damage that 
would be difficult to repair, a Party may apply a bilateral safeguard measure on a 
provisional basis pursuant to a preliminary determination that there is evidence that 
imports have increased as the result  of the reduction or elimination of a customs duty 
under the Agreement, and that such imports cause serious injury, or the threat thereof, 
to the domestic industry. The duration of any provisional measure shall not exceed 200 
days (Article 3.12).  
 Kindly e xplain the critical circumstances that would lead to the imposition of 
provisional safeguard measure and what would be the consequence/s if, after the 
expiration of 200 days of imposition of provisional safeguard, a decision to impose a 
definitive safeguar d measure has not yet been reached?  
 
Response from the Parties  
 
 The critical circumstances where delay would cause damage that would be difficult to repair 
have to be assessed on a case -by-case basis by the investigating authority. This assessment has to 
focus on the existence of damage that would be difficult to repair which is caused by the increased 
imports as result of the trade liberalization agreed in the FTA.  
 
 After the expiration of the 200 days of application, provisional measures should lapse. 
Definitive measures can only be imposed once the investigating authority has finalized an 
investigation complying with all the requirements specified in Articles 3.10 and 3.11 of the EU -Viet 
Nam FTA.  
 
Provisions on trade in services  
 
National treatm ent and MFN  
 
1.27.   Paragraph 4.12: An MFN provision for investment is included in Article 8.6 such that 
a Party shall accord to investors of the other Party and to their enterprises, as regards 
their operation in its territory, treatment no less favourable than the treatment it accords, 
in like situations, to investors of a third country and their enterprises with some 
exclusions related to bilateral, regional or multilateral agreements. MFN treatment does 
not apply to communication services except postal and tel ecommunication services, 
recreational, cultural and sporting services, fishery and aquaculture, forestry and hunting 
and mining, including oil and gas.  
 Are the excluded agreements specifically identified in the EU -VN FTA? Does it include 
both existing and  future agreements?  
 
 
 WT/REG406/2  
 
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  Response from the Parties  
 
 The excluded agreements are not specifically listed. The only clarification refers to the ASEAN 
economic community which will qualify as regional agreement (see footnote 17 of Article 8.6 MFN). 
The MFN treatment does not include any treatment granted pursuant to any bilateral, regional or 
multilateral agreement that entered into force before the date of entry into force of this Agreement.  
Financial services  
 
1.28.   Paragraph 4.33: Building upon its GATS commitments, the coverage and depth of 
the EU's commitments under the Agreement is enlarged while certain limitations remain. 
In addition to the specific reservations of individual EU Member States, the EU as a whole 
reserves the right to adopt or maintain  any measure requiring a financial institution, other 
than a branch, when establishing in a EU Member State, to adopt a specific legal form, on 
a non -discriminatory basis. Moreover, the EU Council directive 85/611 of 20 December 
1985, on the coordination o f laws, regulations and administrative provisions relating to 
undertakings for collective investment in transferable securities, is applicable.  
In relation to Table 4.1 : 
 
Sectors / Sub -sectors  GATS  FTA 
Compared 
to GATS  Trade in services  Investment  
Sector 
coverage  Commit
-mentsa Sector 
coverage  Commit -
mentsa 
7. Financial services        
A. All insurance  and insurance -
related  services  Partial  Improved  Partial  Partial  Partial  Partial  
B. Banking  and other financial  services  Partial  Improved  Partial  Partial  Partial  Partial  
 
 Based on the table, EU 's commitments for banking and other financial services were 
improved compared to GATS. What are these improvements (as the narrative in 
Paragraph 4.33 described only the restrictions maintained by EU)?  
 
Response from the European Union  
 
 The EU 's commitments in (financial) services could improve over time as for example the EU 
Member States remove national limitations or conditions due to legislative changes or due to 
obsolete provisions, such as references to national currencies which have been replaced by the Euro. 
The latter references can still be found in the EU 's GATS schedule.  
General provisions of the agreement  
 
Environment  
 
1.29.   Paragraph 5.72: Article 13.16 excludes trade and environment issues from the 
application of the Agreement's dispute settlement mechanism, and it provides for 
Government consultations as a way to deal with matters arising under Chapter 13. Article 
13.17 reg ulates the establishment of a panel of experts for any matter that has not been 
satisfactorily addressed via Government consultations.  
Labour  
 
1.30.   Paragraph 5.81: Article 13.16 excludes trade and labour issues from the application 
of the Agreement's dispute se ttlement mechanism, and it provides for Government 
consultations as a way to deal with matters arising under Chapter 13. Article 13.17 
regulates the establishment of a panel of experts for any matter that has not been 
satisfactorily addressed via Governmen t consultations.  
a. The Philippines would like to inquire how the Parties intend to operationalize the 
consultation on trade & environment issues as well as labour protection in lieu 
of the non -application of the dispute settlement mechanism.  WT/REG406/2  
 
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  Response from the Parties  
 
 The TSD provisions are subject to a specific dispute settlement mechanism, outlined in 
Chapter 13, Articles 16 to 17. The first steps of this mechanism consist  of the possibility for a Party 
to request consultations with the other Party (Artic les 13(16)2 to 6). A Party may also request that 
the Committee on Trade and Sustainable Development be convened to consider the matter (Articles 
13(16)4 and 5). If the matter has not been satisfactorily resolved by the Committee on Trade and 
Sustainable De velopment, a Party may request that a Panel of Experts be convened to examine that 
matter (Article 13(17)1). The Panel of Experts shall issue a final report with recommendations 
(Articles 13(17)8 and 9). The Parties shall discuss appropriate actions or mea sures to be 
implemented taking into account the final report of the Panel of Experts and the recommendations 
therein.  
 
b. The Philippines would appreciate if the EU can expound on the specific roles of 
the EC's new Chief Trade Enforcement Officer in this cons ultation mechanism.  
Response from the European Union  
 
 As part of the renewed focus on implementation and enforcement, last summer the 
Commission appointed a Chief Trade Enforcement Officer. The CTEO is ensuring that the Commission 
makes better and more effective use of its existing enforcement tools.  
 
Electronic commerce  
 
1.31.   Paragraph 58.3: Section F of Chapter 8 covers electronic commerce. The Parties 
agree to promote, through cooperation, the development of electronic commerce between 
them (Article 8 .50) and they agree not to impose custom duties on electronic 
transmissions (Article 8.51). Regulatory cooperation on electronic commerce is provided 
for in Article 8.52.  
a. We would appreciate if EU and Viet Nam can provide concrete examples on how 
to promot e the development of e -commerce between them.  
Response from the Parties  
 
 E-commerce can be promoted through the non -application of any customs duties on electronic 
transmissions as well as through the cooperation on regulatory issues affecting the provision of e -
commerce. The agreement leaves up to each Party to decide how to r egulate those regulatory issues 
raised by e -ecommerce while it provides for the exchange of views, laws and regulations through a 
dialogue. Article 8.52 provides for an indicative list of issues relevant to the development of e -
commerce that can be discuss ed in a dialogue such as the recognition of certificates of electronic 
signatures, certification services, etc.  
 
Besides promotion activities about the Agreement, Viet Nam is in the midst of establishing a 
B2B e -marketplace focused on the EU market. This e-marketplace will serve as a link between 
Vietnamese firms and international partners, particularly those in the European Union. Other 
provincial portals in various industries will be linked to the e -marketplace. In order to encourage 
and maximize the ben efits of participating enterprises, Viet Nam also plans to facilitate some public 
services through this platform.  
 
b. In relation to meeting the quality standards set by the EU, what initiatives have 
been introduced by Viet Nam to simplify its quality inspect ion and import/export 
quarantine on online sales?  
Response from the Parties  
 
Decree on Customs Export/import for E -commerce is being drafted to facilitate cross -border 
e-commerce as well as to support the implementation of FTAs/RTAs. One of its key goals is to 
streamline customs procedures and digitalize custom documentations for easier e -transactions.  
 
 
 WT/REG406/2  
 
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  Other questions  
 
1.32.   In the one (1) year since the entry into force of the FTA, what measures have been 
undertaken or will be undertaken to promote the  utilization of the FTA by both the EU and 
Viet Nam?  
Response from the Parties  
 
 The promotion of the Agreement is regularly undertaken in the EU as well as in Viet Nam. EU 
Member States as well as the EU Delegation in Viet Nam regularly connect to local a nd EU business 
with a view to explain the Agreement and how to benefit from it.  
 
 The EU has widely publicized the Agreement and its contents, which are published on a 
dedicated website with specific fact sheets and guidelines easing the use of the Agreem ent. The EU 
has also created a series of user -friendly tools, such as Access2Markets, ROSA, which aim at making 
operators aware of the benefits deriving from the Agreement and how to obtain them.  
 
For Viet Nam, right after the Agreement entered into force , the Government issued the 
Decision No. 1201/QD -TTg dated 06 August 2020 on approval of the Plan for implementation of the 
EVFTA in which the Government set out 5 categories of action for the effective implementation of 
the FTA. 5 categories are: (1) Diss emination of the EVFTA information;  (2) Legal and institutional 
building; (3) Improving competitiveness and human resources; (4) Developing guidelines and 
policies for employees and workers' organizations; and (5) Developing policies on social security, 
environmental protection and sustainable development.  
 
1.33.   What concessions were of significant importance to the EU and Viet Nam, 
respectively, in entering and concluding the negotiations for the FTA? Further, were there 
any products being exported by Viet Nam to the EU under the EU GSP whose tariffs were 
not automatically eliminated upon entry into force of the FTA? If yes, how did both sides 
address the issue to ensure balance in the agreed tariff concessions?  
Response from the Parties  
 
 Improved market access in a varied range of agricultural, fisheries and industrial sectors were 
of interest to each side during the negotiation s. The outcome of negotiations and the exchange of 
concessions between the Parties are now enshrined in the Free Trade Agreement.  
 The FTA offers in general term s better market access than GSP to Viet  Nam, in terms of 
tariffs  and suitable Rules of Origin. The Agreement stipulates that the EU preferential customs duty 
under the Agreement shall in no circumstances be higher than the EU customs duties applied to 
goods originating in Viet Nam on the day before the date of entry into force of the Agreement and 
this obligation applies from that date until the seventh year after entry into force. For  some 
products , market a ccess conditions at entry into force will be gradually improved over a number of 
years. The guideline published under: https://ec.europa.eu/taxation_customs/system/f iles/2021 -
06/evfta_guide.pdf . provides explanatory elements on the relation between the Free Trade 
Agreement and the GSP conditions.  
1.34.   Noting that discussions between the EU and Viet Nam for an FTA commenced in as 
early as 2015, how did Brexit factor into t he negotiations and conclusion of the same? 
Further, also in view of Brexit, how do both sides assess the loss of potential gains that 
the United Kingdom could have contributed to the FTA in terms of investments and market 
access for both goods and service s? 
Response from the European Union  
 
 The EU -Viet Nam FTA negotiations were concluded in December 2015, prior to the date of the 
UK referendum of 23 June 2016.  
 
1.35.   The Philippines would like to ask Viet Nam's experience in complying with its FTA 
commitments on IPR protection, particularly on updating its legal framework and 
enhancing its enforcement landscape.  WT/REG406/2  
 
- 16 - 
 
  Response from Viet Nam  
 
In order to comply with the IP commitments in the EVFTA, Viet Nam has reviewed our legal 
documents on IP to propose  necessary amendments and supplements for those documents. 
Currently, the Intellectual Property Law is being amended to ensure the implementation of Viet 
Nam's international commitments on IP protection, which is expected to be passed in June, 2022. 
For so me commitments that require immediate implementation when EVFTA takes effect, Viet Nam 
has directly applied these commitments since the National Assembly ratified the EVFTA (Resolution 
No. 102/2020/QH14 dated June 08, 2020).  
 
To ensure the effective enforc ement of IP rights, the draft version of the revised Intellectual 
Property Law amended some provisions such as allowing Customs to act on their own in respect of 
application of border measures. Viet Nam also focus on training IPR enforcement officers to im prove 
capacity, as well as disseminating IP commitments in EVFTA to the public and businesses through 
workshops, media, etc. to improve their awareness on IP protection.  
 
1.36.   Kindly explain the impact and consequences of Brexit on the implementation of the 
Free Trade Agreement between the European Union and Viet Nam?  
Response from the European Union  
 
 The negotiations of the EU -Viet Nam Agreement were concluded before the UK Referendum.  
 
 There are no specific consequences to report on the implementation of th e Agreement since 
its entry into force.  
 
Question s from the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu  
 
Provisions on trade in goods  
 
Regulatory provisions on trade in goods  
 
Bilateral safeguards  
 
1.37.   Paragraph 3.57 : The Party applying a bilateral safeguard measure shall provide an 
opportunity for consultations in order to mutually agree on appropriate trade liberalizing 
compensation no later than 30 days after the application of the bilateral safeguard 
measure (Article  3.13). C ompensation can be in the form of concessions having 
substantially equivalent trade effects or concessions equivalent to the value of the 
additional duties expected to result from the safeguard measure. If the consultations do 
not result in an agreement on  compensation within 30 days, the Party whose goods are 
subject to the safeguard measure may suspend the application of concessions having 
substantially equivalent trade effects.  
 We would appreciate that the EU and Viet Nam share  their experiences on init iating 
investigations, implementing measures, and conducting consultations on compensation 
regarding bilateral safeguard measures.  
 
Response from the Parties  
 
 Since the entry into force of the EU -Viet Nam Free Trade Agreement, no use has been made 
of bila teral safeguards.  
 
Provisions on trade in services  
 
General provisions on trade in services  
 
National treatment and MFN  
 
1.38.   Paragraph 4.12 : An MFN provision for investment is included in Article 8.6 such that 
a Party shall accord to investors of the other Party and to their enterprises, as regards 
their operation in its territory, treatment no less favourable than the treatment it accords, WT/REG406/2  
 
- 17 - 
 
  in like situations, to investors of a third country and their enterprises with some 
exclusions related to bilateral, regional or multilateral agreements. MFN treatment does 
not apply to communication services except postal and telecommunication services, 
recreational, cultural and sporting services, fishery and aquaculture, forestry and hunting 
and mining, including oil and gas.  
 Please explain the rationale, including policy rationale, for the MFN treatment 
exclusions with respect to each of the excluded s ectors, namely communication services 
(excluding postal and telecommunication services), recreational, cultural and sporting 
services, fishery and aquaculture, forestry and hunting, and mining (including oil and 
gas).  
 
Response from Viet Nam  
Within the fra mework of the EVFTA, the most -favored -nation treatment obligation does not 
apply to a number of sectors and sub -sectors. For Viet Nam, these are important areas, contributed 
to ensuring national security and preserving Viet Nam's cultural values. Therefore , Viet Nam needs 
to make an exception and maintain policy space for these areas.  
Regulatory provisions  
 
Recognition  
 
1.39.   Paragraph 4.56: Article 8.21 covers mutual recognition of professional 
qualifications. The Parties shall encourage the relevant professional bodies in their 
respective territories to develop and provide a joint recommendation on mutual 
recognition to the Committee on Investment, Trade in Services, Electronic Commerce and 
Government Procurement,  established under Article 17.2, witho ut preventing a Party from 
requiring that natural persons possess the necessary qualifications and/or professional 
experience specified in the territory where the service is supplied, for the sector of activity 
concerned.  
 Given the diversities of profess ional services, it might not be necessary for every 
professional service to possess mutual qualifications for providing  services. Is there a list 
in the Annex indicating those sectors that have  acquired mutual recognition?  
 
Response from the Parties  
 
 Indeed, not for all professional services particular qualifications are required. However, there 
is no annexed list covering this matter and it would not be reasonable to attempt setting it up. On 
the EU side, the Member States are competent to determine t he necessity and the level of 
professional qualifications for each professional service supplied within their jurisdiction whereas the 
EU is in charge of the negotiation of mutual recognition agreements on such qualifications. Given 
the multitude of profes sional services and the fact that the EU has 27 Member States, such a table 
would have to contain thousands of entries that would have to be updated at regular intervals. No 
mutual recognition agreement on professional qualifications has been concluded bet ween the EU 
and Viet Nam yet.  
 
General provisions of the agreement  
 
Electronic commerce  
 
1.40.   Paragraph 5.83:  Section F of Chapter 8 covers electronic commerce. The Parties 
agree to promote, through cooperation, the development of electronic commerce between 
them (Article 8.50) and they agree not to impose custom duties on electronic 
transmissions (Article 8.51). Regulatory cooperation on electronic commerce is provided 
for in Article 8.52.  
 
 WT/REG406/2  
 
- 18 - 
 
   Could the EU and Viet  Nam please elaborate on how they intend to p romote the 
development of e -commerce through regulatory cooperation?  
 
Response from the Parties  
 
 E-commerce can be promoted through the non -application of any customs duties on electronic 
transmissions as well as through the cooperation on regulatory issu es affecting the provision of e -
commerce. The agreement leaves up to each Party to decide how to regulate those regulatory issues 
raised by e -ecommerce while it provides for the exchange of views, laws and regulations through a 
dialogue. Article 8.52 provi des for an indicative list of issues relevant to the development of e -
commerce that can be discussed in a dialogue such as the recognition of certificates of electronic 
signatures , certification services , etc.  
Domestic regulation  
 
1.41.   Paragraph 4.54:  Rules on domestic regulation are contained in Sub -Section 1 of 
Section E of Chapter 8. They apply to measures of a Party relating to licensing or 
qualification requirements and procedures that affect the cross -border supply of services, 
establishment and temporary stay for natural persons of the other Party in the territory 
of the Party (Article 8.18). The application is limited to the sectors for which the Parties 
have undertaken specific commitments. Domestic regulation provisions do not apply to 
measure s scheduled as limitations on market access under Articles 8.4 and 8.10 or 
national treatment under Articles 8.5 and 8.11.  
 According to paragraph 4 of Article VI of the GATS, the scope of domestic regulation 
covers measures relating to qualification requi rements and procedures, technical 
standards and licensing requirements. Could the EU and Viet  Nam please explain why 
technical standards are not covered?  
 
Response from the Parties  
 
 The EU and Viet Nam are indeed already subject to domestic regulation dis ciplines pursuant 
to GATS VI. In addition to these disciplines, the EU and  Viet Nam decided to include more domestic 
regulation disciplines in the FTA (see article 8.18 to 8.20) in Sub -Section 1 (Domestic Regulation) 
of Section E (Regulatory Framework) of Chapter 8 (Liberalization of Investment, Trade in Services 
and electronic commerce) of the Agreement. These bilateral domestic regulation provisions are 
therefore top -ups to the multilateral provisions of GATS VI. Measures relating to technical standards 
are covered by Sub -Section 1 if they meet the description of the measures covered by the Sub -
Section as set out in paragraphs 1 to 3 of article 8.18 (Scope and Definitions).  
Questions from Switzerland  
 
Rules of origin  
 
1.42.   Paragraph 3.26:  
a. Is it foreseen, that the lists in Annexes III and IV shall be extended e.g. to 
industrial products as well?  
Response from the European Union  
 
 The Parties to the EU -Viet Nam Free Trade Agreement are not working on such extension. In 
general, as stipulated in Art icle 36 (Committee on Customs) of the Agreement, the Committee on 
Customs may review the provisions of the Protocol on Rules of Origin and submit a proposal to the 
Trade Committee to amend it, including its Annexes.  
 
b. Is the cumulation with other ASEAN cou ntries' materials exclusively foreseen in 
case those countries have a trade agreement with the EU? Therefore, cumulation 
with ASEAN countries in the framework of the EU GSP Regional ASEAN 
Cumulation Scheme is not foreseen?  
 WT/REG406/2  
 
- 19 - 
 
  Response from the European Unio n 
 
 Indeed, it is not foreseen in the Free Trade Agreement. Viet Nam and ASEAN GSP beneficiaries 
can benefit of cumulation under the provisions of the EU 's GSP Scheme during a transition period, 
until 31 December 2022.   
 
c. What proof of origin has to be prov ided by the other ASEAN country? The one 
that ASEAN country has in its FTA with the EU?  
Response from the European Union  
 
 As stipulated in Article 3, paragraph 4 of the EU -Viet Nam FTA, the proofs of origin by the 
ASEAN country have to be the one as if the goods were exported to the EU under the FTA of that 
ASEAN country with the EU.  
 
d. Do the materials - on their journey from other ASEAN countries or the Republic 
of Korea to Viet  Nam - have to fulfil the Non -alteration rule laid down in the 
EU-VN FTA? Or the one of another FTA? If yes, is Viet  Nam obliged to check the 
fulfilment of this rule upon import into Viet Nam?  
Response from the European Union  
 
 As stipulated in Article 3, paragraph 3 of the EU -Viet Nam Free Trade Agreement, the 
applicable rules of origin for such materials shall be determined in the framework of the Free Trade 
Agreement of that ASEAN country with the EU, including the non -alteration rule, if any. It is indeed 
Viet Nam 's responsibility to verify if the transport rule (non -alteration or direct transport) is complied 
with at the time the materials are imported in Viet Nam. The verification obligations are determined 
in the framework of the administrative cooperation agreements.  
 
1.43.   Paragraph 3.30: What is the purpose of that Joint Declara tion? Isn't the purpose 
mentioned therein already covered by Article 36 of Protocol 1 (Committee on Customs)?  
Response from the European Union  
 
 The main purpose of this Joint Declaration is to commit to the regular adaptation to the 
periodic changes of t he HS.  
 
Question s from the United States  
 
Tariff rate quotas  
 
1.44.   Paragraph 3.21: Subparagraph 5(c) of Sub -Section 1 (Union Tariff Rate Quotas) of 
Section  B (Tariff Rate Quotas) of Annex 2 -A contains European Union tariff rate quotas 
for rice.  
 Please, indicate if these tariff rate quotas are modifications of existing W TO Most 
Favoured Nation tariff rate quotas.  
 
Response from the Parties  
 
 No, these rice TRQs are not a modification of existing WTO MFN TRQs.  For Viet Nam, all of 
these TRQs are the same as its existing WTO MFN TRQs.  
Subsidies and state -aid 
 
1.45.   Paragraph 3.64: This paragraph discusses the subsidy section in part B of 
Chapter  10. In 10.4.2 of the EU -Viet Nam Free Trade Agreement (FTA) the text sets out 
"An illustrative list of public policy objectives for which a Party may grant subsidies" and 
includes subsidies "for the creation of employment."  
 WT/REG406/2  
 
- 20 - 
 
  a. How does this provision relate to the provisions of 10.4.1 which states that "In 
principle, a Party should not grant subsidies to enterprises providing goods or 
services if they negatively affect, or are l ikely to negatively affect, competition 
and trade?"  
Response from the European Union  
 
 Article 10.4.1 affirms the general principle  that a Party may grant subsidies when they are 
necessary to achieve a public policy objective. Article 10.4.2 provides an illustrative list of public 
policy objectives for which a Party may grant subsidies, however subject to the conditions set out in 
the Section.  
 
b. Is a subsidy granted for the creation of employment permitted even if it will have 
a negative effect  on competition and trade?  
Response from the European Union  
 
 In principle, subsidies may be granted for public policy objectives, in so far as the other 
provisions set out in the Section are followed. The transparency obligation, consultations, and 
condit ions on certain subsidies ensure that any negative effects of the subsidies on competition and 
trade are known and may be addressed.  
 
1.46.   Paragraph 3.64: This paragraph discusses the subsidy section in part B of 
Chapter  10. Article  10.5.3 states that " This Sec tion applies to specific subsidies to all 
enterprises, including public and private enterprises ." 
 Can you please confirm that the term "public and private enterprises" would include 
State Enterprises and enterprises under the ownership or control of the S tate?  
 
Response from the European Union  
 
 Yes, the provision covers all enterprises, independently of their ownership, and therefore 
covers also State Enterprises and enterprises under the ownership or control of the State.  
1.47.   Paragraph 3.66: Why do the consu ltation provisions of Article 10.8 not apply to 
subsidies with conditions covered in Article 10.9?  
Response from the European Union  
 
 The consultations provisions of Article 10.8 are intended to obtain more information and to 
minimize any negative effects of subsidies that may negatively affect the trade or investment 
interests of the other Party. By contrast, the subsidies subject to conditions in Article 10.9 fall under 
a stricter discipline whereby those subsidies shall not be granted unless the conditio ns are followed.  
 
1.48.   Paragraph 3.67: In Article 10.9.1 it states that " The Parties shall apply conditions 
to the following specific subsidies. " 
 What are the conditions that shall be applied to the specific subsidies?  
 
Response from the European Union  
 
 The conditions are spelled out in each of the sub -points (a) and (b) of Article 10.9.1. Sub -
point (a) specifies that Government guarantees are all owed only if they are limited. Sub -point (b) 
specifies that support to insolvent or ailing enterprises is only allowed if there is a credible 
restructuring plan complying with the requirements set out.  
 
Import duties and charges, and quantitative restricti ons 
 
General provisions  
 
1.49.   Paragraph 3.7 under section 3.1 on "Import duties and charges, and quantitative 
restrictions," sub -section 3.1.1 on "General Provisions", indicates that Article 2.17 of the WT/REG406/2  
 
- 21 - 
 
  EU-Viet Nam FTA states that each party shall notify the ot her party of its existing export 
licensing procedures.  
 Does either party currently maintain export licensing procedures and if so please 
provide a list of such procedures?  
 
Response from the Parties  
 
 The EU and Viet Nam have notified to each other their respective export licensing procedures , 
which apply to a number of goods traded between the Parties.  
 
Transparency  
 
1.50.   Paragraph 5.1 on Transparency: Rules governing general transparency disciplines 
are co ntained in Chapter 14. Articles 14.1 through 14.7 provide for objectives and scope, 
definitions, publication, enquires and contact points, administration of measures of 
general application, review and appeal, good regulatory quality and administrative 
beha viour.  
 Article 14.7 of the Agreement provides an opportunity for the EU and Viet Nam to 
exchange information and best practices on their respective regulatory reform processes 
and regulatory impact assessments. Have any exchanges on these topics taken pla ce since 
the agreement entered into force?  
 
Response from the Parties  
 
 The EU and Viet Nam have regular contacts to implement fully the agreement and exchange 
information on their regulatory activities.  
 
Since the entry into force, Viet Nam and the EU have held several technical level meetings on 
general implementation of the EVFTA as well as meetings of the specialized committees established 
by the EVFTA to consider any matter arising in their respective areas as well as carry out their 
respective task s during implementation, exchange views and update on specific topics of interest, 
as well as share best practices on effective implementation of the FTA.  
 
Intellectual property rights  
 
1.51.   Paragraph 5.47: "Article 12.28 of the EU -Viet Nam FTA provides an exception to 
geographical indications protection that allows "any persons … who made actual 
commercial use in good faith" of the terms asiago, fontina, and gorgonzola in the 
Vietnamese marke t before January 1, 2017, to be able to continue using those terms for 
those products, even after the entry into force of the EU -Viet Nam FTA.  
a. Can Viet Nam explain how it is defining "any persons" for the purposes of 
implementing Article 12.28?  
Response from the Parties  
 
From the EU's perspective both expressions find their roots in TRIPS provisions i.e. art. 24.4 
(use in good faith) and art. 24.8 (any persons). They are commonly used in IP law, TRIPS as well in 
FTA agreements.  
 
 The terminology "any per sons" coincides with the legal concepts of any "legal or 
physical/natural person".  
 
The terminology "use in good faith " or "good faith " is mentioned in several provisions of TRIPS. 
Article 24 contains three references to good faith. These references relat e to the "good faith" of the 
nationals of WTO Members in applying for or registering trademarks. Articles 48.2 and 58(c) of the 
TRIPS Agreement refer to the "good faith" of public authorities or officials in administering laws for 
the protection or enforce ment of intellectual property rights. In the context of Article 12.28 of the 
EVFTA in our understanding it means that the said persons did not have the intention to take unfair WT/REG406/2  
 
- 22 - 
 
  advantage or they had reasonable belief that that their actions were not contra ry to existing legal 
principles within the relevant jurisdiction (i.e. in Viet Nam).  
 
b. Can Viet Nam explain how it is defining "actual commercial use in good faith" for 
the purposes of implementing Article 12.28?"  
Response from the Parties  
"Actual commercial use " is understood as the "use" (as referred  to in Article 124 of Viet Nam's 
IP Law, i.e. sale,  import, advertisement etc.) in the "commercial activity" (as referred to in Article  3.1 
of Commercial Law, i.e. activities for the purpose of generat ing profits) and this "commercial use" 
must be "actual" (i.e. real action on the market in Viet Nam, is opposed to token or artificial use 
designed or conducted solely to acquire the right to use the protected names).  
__________