WORLD TRADE  
ORGANIZATION   
WT/REG275/M/1 
7 July 2011  
 
(11-3348) 
Committee on Regional Trade Agreements 
Sixty-first Session  
 
 
 
ECONOMIC PARTNERSHIP AGREEMENT BETWEEN JAPAN AND VIET NAM,  
GOODS AND SERVICES 
 
Note on the Meeting of 28 June 2011 
 
Chairman:  Mr. F. Riegert (France) 
 
 1. The 61
st Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/ AIR/3754, and corrigendum 1 dated 17 May and 
21 June 2011.  
2. Under Agenda Item B.III of this session, th e CRTA considered the Economic Partnership 
Agreement (EPA) between Japan and Viet Nam (her einafter 'the Agreement'), goods and services.  
3. The Chairman noted that the Agreement had entered into force on 1 October 2009.  It 
had been notified to the WTO by the Parti es on 1 October 2009 under Article XXIV:7(a) of 
the GATT 1994 and the Understanding on the Inte rpretation of Article XXIV of GATT 1994 
as an Agreement establishing a free trade area (document WT/REG275/N/1) and under GATS Article V:7(a) as an Agreement providing for the liberalization of trade in services within the 
meaning of Article V of the GATS (document S/C/N/ 513).  The text of the Agreement was available, 
together with its Annexes, on the Parties' official  websites.  The Factual Presentation on the goods and 
services aspects (document WT/REG275/1 dated 12 Apr il 2011) had been prepared by the Secretariat 
on its own responsibility in full consul tation with the Parties, in accorda nce with paragraph 7(b) of the 
Transparency Mechanism for Re gional Trade Agreements (document WT/L/671).  In addition, 
written questions and replies on the Agreement ha d been distributed in document WT/REG275/2, 
dated 10 June 2011.  He proposed to organize the c onsideration of the Agreement by first asking the 
Parties and then other Members to give any gene ral comments.  The Committee would then turn to 
the specifics of the Agreement, using the Factual Presentation, to guide the debate and then through 
the questions and replies document. 
4. The representative of Viet Nam thanked the Committee for providing an important 
opportunity to present the Agreement on Economic Partnership between Viet Nam and Japan, and 
through that, Viet Nam's policy of integration into  the regional and multilateral trading system.  The 
Agreement had been negotiated in January 2007, afte r a joint study completed earlier and an official 
declaration by the Leaders of the Parties in 2006.   The decision to negotiate and conclude the 
Agreement was an integral part of the firm policy direction of economic integration into the regional 
and global economy.  In implementing this policy di rection, Viet Nam had fully committed to making 
its utmost effort to enhance the multilateral trading system, with the WTO playing a central role.  At 
the same time, Viet Nam was negotiating and concludi ng bilateral and regional trade agreements with 
the other States of the Association of South East Asia Nations (ASEAN), with a view to 
complementing the multilateral trading system represented by the WTO. 
 WT/REG275/M/1 
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  5. Following these principles, Viet Nam believed th at the Agreement with Japan, and all other 
EPAs/FTAs that it had signed, were fully consistent with the basic principles and criteria of the WTO applicable to regional trade agreements.  They also shared the common objectives of the WTO which 
was to promote economic and trade relations betwee n the Parties, which in turn, would bring about 
stable development and the wealth of nations.  Towards these ends, careful analysis showed Japan to 
be one of the most suitable EPA/FTA partners for Viet Nam.  After almost 35 years of diplomatic 
relations, both countries had enjoyed comprehensive and progressive friendships in many areas.  From 
an economic perspective, revenue from bilateral trade in 2007 was over US$12 billion, three times 
higher than that in 2000.  Direct investment by Japanese investors in Viet Nam was also widespread 
over many sectors from industry to services and agricu lture.  In 2006, when the negotiations were 
launched, over US$9 billion of Japanese direct invest ment had been registered in Viet Nam, making 
Japan the third biggest investor in Viet Nam.  More importantly, with actual investment of more than 
US$ 4.8 billion, Japan ranked the first among operating investors in Viet Nam.  In addition to that 
encouraging foundation, the two economies enj oyed very complimentary production and trade 
structures.  Viet Nam was competitive in tropi cal agricultural products and consumer industrial 
products such as footwear and clothing, which were  welcomed in Japan.  On the other hand, Japan 
was famous for its basic metal and high-tech products, as well as the latest technology and investment 
capital, which were critical for Viet Nam's industria lization and modernization.  The Agreement also 
provided Japanese investors and exporters access  to the ASEAN market of over 550 million 
consumers and other markets with trade preferen ces with Viet Nam and ASEAN such as China, 
Korea, and India.  Vietnamese exporters in turn  would enjoy access to th e Japanese market of 
125 million wealthy consumers.  Last but not least, the two countries shared a common view of the 
significant benefits that an integrated East As ia could bring to regional and global peace and 
prosperity. 
6. To achieve those strategic benefits, following more  than ten rounds of official and informal 
negotiations, the Parties had reac hed consensus on a comprehensive agreement, covering numerous 
measures to liberalize trade in goods, trade in service s and investment;  improve transparency and the 
business environment; enhance the movement of  natural persons and strengthen bilateral 
comprehensive economic cooperation.  The Parties had made substantial commitments in both trade 
in goods and services.  In addition, commitments  concerning all other forms of trade regulatory 
measures, such as technical barriers to trade, sanitary and phytosanitary measures, safeguards, 
transparency measures, and the protection of intell ectual property rights had been in full conformity 
with the GATT 1994 and GATS.  The Agreement also provided for an institutional framework with a 
Joint Committee and a number of sector-specific Sub-Committees including for rules of origin, SPS, technical regulations, standards and conformity asse ssment procedures, services, intellectual property, 
improvement of the business environment, moveme nt of natural person, customs procedures and 
economic cooperation to ensure the proper  implementation of commitments made. 
7. Given its comprehensive coverage  and substantial commitments, bo th Parties had preferred to 
name the Agreement the Agreement on Economic Part nership with the high hope that it would be a 
mutually beneficial framework towards future  flourishing bilateral ec onomic relations.  The 
Agreement was also Viet Nam's first comprehensive bilateral FTA.  He thanked the WTO Secretariat 
for preparing the Factual Presentation, which provi ded many more details.  Japan and Viet Nam had 
responded to a number of questions from WTO Memb ers, including the Separate Customs Territory 
of Taiwan, Penghu, Kinmen and Matsu, the European  Union, the United States, and Australia, mostly 
requesting further clarifications on the Parties'  commitments in tariffs, services, institutional 
infrastructure, and relations between the Agreemen t and other frameworks.  Responses to questions 
from Mexico, which had only been received shortly before the meeting, had been provided to the 
WTO Secretariat. 
  WT/REG275/M/1 
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  8. The effects on bilateral trade were varied: dom estic, international, ec onomic and political, and 
even natural.  However, certain  impacts from the Agreement were not deniable.  Despite the short 
period of the operation of the Agreement, according to Viet Nam's statistics, the results had been 
positive with bilateral trade revenues in 2010 at US$16.7 billion, an increase of 22% on an annual 
basis, both in terms of exports from Viet Nam (US$7.7 billion, or a 23% increase) and imports to 
Viet Nam (US$9.06 billion, or an  increase by 24%).  From a broader perspective, Viet Nam believed 
that the Agreement would provide a favourable and predictable framework for further enhancing trade 
and investment between the two economies, upgrad ing the ties between the strategic cooperation 
partners, and significantly contributing to th e regional and multilateral trading systems.  
9. The representative of Japan thanked the Co mmittee for the opportunity to present the 
important elements of the Agreement between Japa n and Viet Nam for an Economic Partnership for 
review by WTO Members.  He expressed his deep gratitude, on behalf of the Government of Japan, 
for the numerous messages of so lidarity and encouragement received from around the world since the 
Great East Japan Earthquake on March 11. Many reli ef supplies and donations had been delivered to 
the stricken areas and rescue teams from many  countries and regions had devoted themselves to 
rescue and search activities, and to provide medi cal assistance under severe circumstances. It was 
hard to find the words to describe how much su ch generosity had enc ouraged and supported the 
Japanese people. Japan would never fo rget that the world stood by it in its moment of need and would 
emerge as a more attractive nation to return the wa rm solidarity and support extended by the world.  
10. Turning to the Agreement, he noted that Jap an’s basic external economic policy was to 
maintain and strengthen the multilateral trading system centering on the WTO and it would promote 
the conclusion of bilateral EPAs/FTAs that complemented but not replaced the WTO.  As part of such 
a policy, Japan concluded with Viet Nam the inv estment agreement and the Agreement, which had 
entered into force in 2009.  It was the 11th Ag reement concluded by Japan, following those with 
Singapore, Mexico, Malaysia, Chile, Thailand, Philippines, and ASEAN. 
11. The Agreement's coverage was wide such as the liberalization of trade in goods and services, 
movement of natural persons, inte llectual property, and improvement  of the business environment.  
By promoting economic partnership in these areas, it aimed at further strengthening economic ties 
between Japan and Viet Nam.  Viet Nam had a pop ulation of 85 million and an ample and diligent 
workforce, and had been experiencing dramatic eco nomic growth in recent years.  In addition, as 
could be seen from a steady increase of investment by Japanese enterprises manufacturing automobiles or electronic products in Viet Nam,  its market was highly appealing to Japanese 
industries as a promising and potential place to invest  in and export to.  In addition, the Parties had 
close economic ties, while for Viet Nam, Japan was the most prominent investor, and the third largest 
trader, following China and the United States.  Th e Agreement was expected to further strengthen 
such bilateral economic ties, and make firmer th e economic partnership with ASEAN as a whole.  
Many top Japanese enterprises in area s such as automobiles, two-wheeled vehicles, and electronic 
products had entered the Viet Nam market, and saw it as an important manufacturing base.  For these 
Japanese manufacturers, the abolition or reduction of customs duties on parts and materials 
unavailable in Japan was helpful in curtailing production costs, enhancing competitiveness, and 
expanding markets.  
12. In October 2006, the Prime Ministers of Japan and Viet Nam (Mr. Abe and Mr. D ũng) 
decided to start negotiations.  The first round of negot iations was held in January 2007, and thereafter, 
during nine meetings.  At the 9th meeting in Se ptember 2008, both countries confirmed the successful 
completion of negotiations on major elements, to be followed by the finalization of the legal texts of 
the Agreement.  The Agreement was signed in Tok yo by the Minister for Foreign Affairs of Japan 
(Mr. Nakasone) and the Minister of Industry and Tr ade of Viet Nam (Mr. Hoang) on 25 December 
2008, and entered into force on 1 October 2009.  WT/REG275/M/1 
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  13. The Agreement was a comprehensive economic partnership agreement, and included tariff 
elimination as its central component. Within ten years,  it would eliminate up to 92% of tariffs in terms 
of two-way trade volume in 2006.  In addition, the two countries did not maintain any restrictive 
regulations of commerce that would be incompa tible with GATT 1994, and the Agreement neither 
established any restrictions on commerce nor maintain ed any existing ones.  Thus, the Agreement met 
the GATT 1994 requirement that duties and other r estrictive regulations of commerce should be 
eliminated on substantially all trade, which made  it compatible with Article XXIV of GATT 1994.  
Moreover, it provided national treatment in trade in  services for a broad range of sectors/sub-sectors 
and was therefore compatible with Article V of th e GATS.  It provided not only for the liberalization 
of trade in goods and services, but also covered ot her matters such as the simplification of customs 
procedures, cooperation between the authorities agai nst illegal trade, exchange of information on 
sanitary and phytosanitary measures, and effective and transparent implementation of the intellectual 
property protection systems.  The Agreement estab lished in addition to the Joint Committee, Sub-
Committees in areas such as customs procedures, trad e in services, movement of natural persons, and 
cooperation.  The Joint Committee had met once at the time of entry into force of the Agreement, and 
the Operational Rules for its effective implemen tation had been adopted.  The Sub-Committee on the 
Movement of Natural Persons had met three times th us far.  While a Chapter on Investment had not 
been included in the Agreement, the Investment  Agreement between Japan and Viet Nam, which 
stipulated high-level commitments, had been incor porated through the coordination provision (Article 
9(4)), and operated essentially as a Chapter on Investment. 
14. He noted that it was difficult to measure the genuine economic effects of the Agreement as 
the actual volume of trade and investment between the Parties could have been affected by various 
factors, such as economic fluctuations resulting from the global economic crisis and natural disasters.  
Nevertheless, it was clear that the Agreemen t provided a solid foundation and institutional 
infrastructure for increased tr ade and investment with Viet Nam by strengthening economic 
partnership through various means provided in the Agreement.  He thanked the Committee for the 
opportunity to submit a report on the Agreement which Japan was convinced contributed to furthering 
economic prosperity in Asia as we ll as strengthening economic ties between the Parties.  Japan would 
also continue its efforts to enhance the mu ltilateral trading system based around the WTO. 
15. The Chairman opened the floor to Members for any general comments. 
16. The representative of the European Union th anked the Parties for their comprehensive 
presentations and written answers.  He noted th at the Agreement did not provide for broad 
liberalization in all sectors and the replies to writte n questions in this regard had not really been 
satisfactory as they did not provide further informati on.  While it was true that RTAs were the result 
of negotiations and processes, the Committee should r eceive a more detailed explanation for why the 
Parties had not substantially liberalized whole sector s.  The EU encouraged the Parties and notably 
Japan to make further commitments in areas that had not yet been liberalized and to make use of the 
general review clause for trade in goods to review  their concessions five years after the entry into 
force of the Agreement. 
17. The representative of Mexico thanked the Secret ariat and parties for their work and replies 
submitted and he would contact the Parties if  any further clarifications were needed. 
18. The representative of the United States thanke d the Parties for the information provided and 
the Secretariat for the Factual Presentation.  The Factual Presentation indicated that Viet Nam would 
eliminate duties on almost 92% of all tariff lines c overing roughly 90% of its imports (by value) from 
Japan;  91.7% of industrial lines became duty free a nd almost 93% of agricultural tariff lines became 
duty free.  Japan eliminated duties on 89% of all tariffs covering 96.5% of imports by value from 
Viet Nam;  however although around 96% of industrial tariffs became duty free only 61% of agricultural tariffs became duty free.  It wa s disappointing to note Japan's disproportionate  WT/REG275/M/1 
 Page 5 
 
 
  liberalization between industrial and agricultural sector s and as the United States had stated repeatedly 
in the CRTA the selective coverage of agricultura l goods had adverse effects on the trade of other 
Members.  Moreover, the continued, systematic prot ection of these Parties' agricultural sectors in their 
FTAs made multilateral liberalization all the more difficult. 
19. The representative of the European Union no ted that the Agreement did not contain 
provisions for the elimination and prohibition of e xport duties of any good destined for the other 
Party.  He asked the Parties to explain why such provisions were not included and to elaborate on any 
current and future export duties and how they inte nded to ensure compliance with provisions under 
Article XXIV of the GATT to eliminate duties and other restrictive regulations of commerce on substantially all the trade between the Parties.  In this regard, the EU recalled that the obligation in 
Article XXIV was to eliminate duties betw een the Parties, including export duties. 
20. The representative of Japan indicated that there were no export duties between the Parties, nor 
was there any intention at present to introduce su ch duties.  While acknowledging the point made by 
the EU he indicated that this had not been a major issue in the negotiations. 
21. The representative of Viet Nam said that as the EU had indicated, the Agreement resulted 
from the process of negotiations reflecting the interest s of the Parties in their trade relations.  He 
understood that export duties were not prohibited expr essly in any WTO regulation.  It was important 
to point out that in the Agreement the Partie s had fully complied with the requirements of 
GATT Article XXIV to have substantial liberalizati on of trade and as could be seen, at the end of 
implementation Viet Nam would have libera lized almost 90% of trade and Japan 96%. 
22. The representative of Japan responding to the questions from the United States and the 
European Union on liberalization noted that the subs tantially all trade criteria applied to overall trade 
and did not require the same level of liberalizati on in all sectors.  Second he pointed out that the 
Agreement had achieved a very high le vel of liberalization, particularly  on the date of entry into force 
of the Agreement when 82% of lines and 93% of im ports were liberalized with final liberalization 
expected of 96.5% of imports.  There were also ot her kinds of liberalization such as tariff rate quotas 
in the package so he believed that it would be better to take a look at the overall picture before making 
a judgement on consistency with GATT Article XXIV. 
23. The representative of Australia joined other de legations in thanking the Parties for their 
written responses which had helped to  better understand elements of the Agreement.  He said that the 
intent of Australia's written questi on on substantially all the trade had been to express concern that the 
level of liberalization did not meet the substantiall y all the trade requirement.  Japan in its presentation 
of the Agreement had made the co mmitment to liberalize tariffs the centrepiece.  In their responses, 
the Parties had indicated that substantially all the tr ade did not amount to all trade.  Australia was not 
suggesting this but rather that substantially all the trade must fall somewhere between the 
commitments made by the Parties and 100% tariff e limination.  He noted the comment from Japan 
that all the trade of all Parties to the Agreement should be considered when measuring substantially 
all the trade but when one Party was committing to eliminate less than 90% of applied tariffs that 
would obviously drag down the overall level of tariff elimination.  Second, on Question 5 relating to  
Japan's scheduling of its MFN exemptions on fishin g, energy and other services, Australia's question 
was not on the scheduling but on the commitments and why Japan had committed to less in the Agreement than it had in the GATS. 
24. The representative of the United States directed Members to Question 19 from the 
United States in which it had noted that 946 tariff lines would retain a duty at the end of 
implementation.  The majority fell under HS Sec tions I-IV (about 84%) and notably 53% of lines for 
animal and animal products and 51% for prepared  foods would still retain a duty at the end of 
implementation in 2024.  So like Australia, the United States remained concerned about WT/REG275/M/1 
Page 6  
 
  implementation and were surprised to hear Japan  justifying its delayed or non elimination of 
agricultural tariffs by the elimination of industrial tariffs. 
25. The representative of Japan responding to Australia's question on MFN exemptions in 
services sectors acknowledged that these were included in the Agreement because they were sensitive 
sectors but they were not in Japan's exemptions under the GATS.  Japan was not intending to request 
a waiver in terms of GATS commitments.  With  regard to the question from the United States his 
intention had not been to use the elimination of in dustrial tariffs to justify what had been done in 
agriculture but he had simply indicated the need to look at overall tariff elimination. 
26. The Chairman said that the consideration of the goods and services aspects of the Economic 
Partnership Agreement between Japan and Viet Na m had allowed the Committee to clarify a number 
of questions and oral discussion of  the RTA could now be concluded in accordance with paragraph 11 
of the Transparency Mechanism.  If any delegations  wished to ask follow-up  questions they were 
invited to forward submissions in writing to the Secr etariat by 6 July 2011 and Parties were asked to 
submit replies in writing by no later than 20 July  2011.  In accordance with paragraph 13 of the 
Transparency Mechanism all written submissions , as well as minutes of the meeting would be 
circulated promptly, in all WTO official la nguages, and would be made available on the 
WTO website. 
27. The Committee took note of the comments made. 
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