STUDY PAPER POSSIBLE USE OF THE OMNIBUS LEGISLATIVE TECHNIQUE FOR IMPLEMETATION OF VIETNAM'S WTO OBLIGATIONS AND COMMITMENTS.

Transcription

1 STUDY PAPER POSSIBLE USE OF THE OMNIBUS LEGISLATIVE TECHNIQUE FOR IMPLEMETATION OF VIETNAM'S WTO OBLIGATIONS AND COMMITMENTS March 2006 Institute of Law Science The World Bank 1

2 TABLE OF CONTENTS I. INTRODUCTION Context Study Scope, Objectives and Special Considerations Study Scope Study Objectives Special Considerations Methodology and Approach...7 II. FINDINGS Analysis and Assessment of the Current Legal System of Vietnam Implementation of WTO Obligations for Vietnam WTO Multilateral Requirements and Rules Vietnam's WTO Commitments Foreign Experiences on Using Omnibus Legislative Technique for Implementation of WTO and Other International Trade Agreements United States Canada Australia Experiences of Some Other Countries on Implementation of the WTO Obligations and International Trade Agreements Some Observations and Comments on Foreign Experiences with Respect to The Omnibus Approach Assessment of The Possibility and Other Considerations of Vietnam to Apply Omnibus Approach Assessment of The Recent Developments in Vietnam s Legislative Works and The Need to Apply OmnibusTechnique Assessment of The Recent Developments in Vietnam s Legislative Works The Need for Application of The Omnibus Technique for Vietnam...24 III. PROPOSALS AND RECOMMENDATIONS Areas of Law Where The Omnibus Legislative Technique May Apply Forms and Types of Legal Normative Documents may be Applied the Omnibus Legislative Technique Organizational Arrangements for The Application of The Omnibus Legislative Technique Structure of an Omnibus Bill Legislative Initiatives for an Omnibus Bill and the Organizing of the Drafting Process Legal Appraisal and Examination of an Omnibus Bill; Method of Adopting an Omnibus Bill; Consolidation of Legislations Amended by an Omnibus Bill...34 IV. ANNEX Annex I: List of WTO Agreements Annex II: Results of The Survey on Possible Application of Omnibus Legislative Technique Annex III: Foreign Experiences on Implementation of the WTO Obligations and International Trade Agreements Annex IV: Written Comments by Independent Experts on the Draft Study Paper (prepared by Dr. Duong Thanh Mai and her team)

3 FOREWORDS This is a Study Paper on Possible Use of the Omnibus Legislative Technique for Implementation of Vietnam's Obligations and Commitments in the context of the accession to the World Trade Organization (WTO). The Paper has been prepared by a group of national independent legal experts (national consultants) with funding provided by the World Bank. A draft version of the Study Paper was presented for comments at two workshops held on March 10, 2006 and March 13, 2006 in Hanoi and Ho Chi Minh City, respectively. This Paper has been revised and improved based on the comments received. All the contents and views expressed in the Paper do not relate to or aim at reflecting views or opinions of any Vietnamese government agencies and organizations or of the World Bank or any other individuals. The national consultants would like to express sincere thanks to the World Bank for the timely, effective and valuable assistance, which are indispensable for a study of this kind. The Paper consists of four main parts: Part I. Introduction - Brief introduction on the context, objectives, special considerations, scope, methodology and approach of the Study Paper. Part II. Substance of the Study Findings Part II contains the findings of the Study and is divided into 5 sections: 1. Analysis and Assessment of the Current Legal System of Vietnam; 2. Implementation of WTO Obligations for Vietnam; 3. Foreign Experiences on Using Omnibus Legislative Technique for Implementation of WTO and Other International Trade Agreements; 4. Assessment of the Possibility and Other Considerations of Vietnam to Apply the Omnibus Approach; 5. Assessment of the Recent Developments in Vietnam s Legislative Works and the Need to Apply the Omnibus Technique. Part III. Proposals and Recommendations. The national consultants make proposals and recommendations on the needs for using the omnibus legislative technique in the WTO context (and for the longer and wider use in other areas of law) and how to do it in Vietnam, including how to overcome legal, administrative and technical difficulties that may come up from the Use of the omnibus legislative technique in Vietnam. Part IV: Annexes Annex I: List of WTO Agreements; Annex II: Results of the Survey on Using Omnibus Legislative Technique; Annex III: Foreign Experiences on WTO and Other International trade Agreement Legal Implementation Related to Omnibus Legislative Technique; Annex IV: Written Comments by Independent Experts on the Draft Study Paper. 3

4 I. INTRODUCTION 1. Context To adjust domestic laws and regulations to implement the WTO obligations and commitments is an important work for Vietnam to join this multilateral trade organization. This exercise (adjustment of laws and regulations) has been done by all the WTO Members as Article XVI.4 of the Marrakesh Agreement that establishes the WTO provides clearly Each Member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the Annexed Agreements. But, the WTO does not spell out a uniform manner or formula for all WTO Members to use in implementing their obligations in their respective legal systems. Instead, the choice is made by individual Members as sovereign states. Although the above-mentioned Article XVI.4 is applicable to every WTO Member, Vietnam seems to be in a unique position. Basically, WTO Members are not required to adjust their legal systems before they become Members (although legally they are obliged to implement their WTO obligations and commitments upon the entry into legal force of the obligations and commitments). As a result, not a few obligations or commitments of even WTO founding Members are implemented only recently either voluntarily or compulsorily (as a obligation to comply with the WTO dispute resolution rulings and recommendations). However, WTO Members, especially the U.S. has requested Vietnam to adjust the legal system according to the WTO obligations and commitments before it becomes a WTO Member 1. Therefore, the legal adjustments for the WTO compliance has become a critical factor for Vietnam to join the WTO. Based on the new Law on Conclusion, Accession and Implementation of International Treaties, the movements of the government and the current capacity of Vietnamese government agencies and officials for law implementation, it is unlikely that WTO rules and obligations will be directly applied in Vietnam. Instead, it is more likely that they will be implemented in Vietnam s legal system through enactments of new laws and regulations 2. In recent years, Vietnam has made enormous efforts to improve and adjust its legal system in light with WTO requirements. These efforts have brought positive effects to Vietnam's overall reform process in general and WTO negotiation in particular. But, it is understandable that as by March 2006 Vietnam's WTO negotiation results and commitments have not been officially made public and the negotiation is underway, certain WTO commitments may have not been taken into account in recent WTO-related legal 1 One of the must have items of the Vietnam's WTO negotiation is Vietnam's offer on legislative action plan for WTO compliance. In addition, Vietnam has been asked to send to the WTO Members not only the adopted WTO-related laws and regulations, but also the ones being drafted. 2 For more information see the separate Study Report on the impacts of the 2005 Law on Conclusion, Accession and Implementation of International Treaties on the implementation of WTO agreements and commitments. The Report has been prepared with the World Bank's technical assistance for "Studying and Assessing Legal Aspects Relating to Negotiating, Signing and Implementing WTO Agreements and Commitments Under Vietnamese Law". 4

5 adjustments. This is particularly true when the Chief Negotiator of Vietnam to the WTO described that the remaining issues are all "difficult" and "sensitive". In the negotiation context, assuming the win-win compromise scenario prevails, it is more likely that additional legal adjustments are needed to make Vietnamese laws and regulations conform with the WTO rules and obligations. In addition, although Vietnamese government has been determined and has tried its best to adjust its law and regulations for the WTO compliance, WTO Members that are not willing to accept or want to delay Vietnam's WTO membership, may interpret the situation that the recent legal adjustments fail to conform with WTO requirements and ask for additional legal changes. The scenario is possible for Vietnam due to the complexity and technicality of the WTO rules, which in many cases can be understood and interpreted differently. If that is the case, it is very likely that Vietnam has to make more legal changes before it becomes a WTO Member. As time is critical for Vietnam, but the current legislative process for a bill to be adopted is long and complex, Vietnam should apply a new legislative technique which is faster and more effective to complete all the necessary legal changes before joining the WTO. In the context of recent legal developments in Vietnam, the technique of using one legal normative document to change many other legal normative documents (hereafter referred to as "omnibus technique") has been received more attentions. Foreign experiences have shown that the omnibus technique has been effectively used in a number countries, particularly those having common law tradition, like the United States, Canada, and Australia. The technique has been used in different areas of law, but most notably in implementing international trade agreements in the domestic legal systems. The advantages of the omnibus technique is very relevant for Vietnam to consider: it is more efficient and faster, and eliminates the duplication or repetition of many legislative steps, compared with the traditional legislative techniques where the same contents of an omnibus bill are put in different smaller individual bills. Further, as foreign experiences show the omnibus technique allow the legislature to adopt at one time many legislative issues which are hard to be adopted if put in separate smaller bills that are to be adopted at different time. In addition, the omnibus technique ensures the transparency and uniformity of the legal system as it allows one bill to deal with all or most related legal problems, e.g. the implementation of all WTO commitment are put in one bill. As a matter of fact, the Government of Vietnam has taken into account the possible use of the omnibus technique for the WTO negotiation purposes. The Prime Minister in the Directive 08/2005/CT-TTg of April 4, 2005 on Advancing the Progress and Quality of Making WTO Related Laws and Regulations in has assigned the Ministry of Justice to work with other agencies to "study and propose timely [the Use of omnibus technique] and be proactive to draft laws and ordinances in the form of..." an omnibus bill 4. 3 The contents of the Directive closely relate to many proposals and recommendations made by the national and international consultants in the previous Bank-sponsored study exercise. 4 The word bill in this Paper, in addition the normal meaning of the draft law, may have a broader meaning in many situations to include all draft legal documents (law and under law regulations) before being adopted or issued. 5

6 In the current context, in addition to the time factor, Vietnam may need to think about another important factor that is the uniformity and conformity of its legal system with the relevant international commitments. This is particularly true for the issuance of many under law regulations to implement the recent WTO-related laws. If the traditional legislative techniques are used to issue the implementing regulations, it may be too late or hard to ensure the conformity of the implementing regulations with the WTO commitments. In short, the requirements of the WTO negotiation process and the needs for legal changes for socio-economic development purposes in Vietnam tend to indicate that it is an appropriate time and necessary to have a comprehensive study of the omnibus technique. Based on the study results, specific recommendations and proposals should be made on whether the omnibus technique should be officially adopted in Vietnamese law. 2. Study Scope, Objectives and Special Considerations 2.1. Study Scope Since the omnibus technique is a new topics for Vietnam, to make appropriate and feasible proposals and recommendations for Vietnamese conditions, the Study Paper focuses on the following main contents: Analysis and Assessment of the Current Legal System of Vietnam; Implementation of WTO Obligations for Vietnam; Foreign Experiences on Using Omnibus Legislative Technique for Implementation of WTO and Other International Trade Agreements; Assessment of The Possibility and Other Considerations of Vietnam to Apply Omnibus Approach; Assessment of The Recent Developments in Vietnam s Legislative Works and the Need to Apply the Omnibus Technique Study Objectives The Study is aimed at assessing the possibility of using the omnibus legislative technique to make Vietnam's law and regulations conform with the WTO obligations and commitments, and making relevant proposals and recommendations on the Use of this technique in Vietnamese context to speed up the needed legislative reforms for the WTO purposes; ensuring the uniformity and coherence of legal normative documents regulating trade matters and other documents of the legal system; opening up opportunities for a possible wider application of the omnibus legislative technique in the legal system of Vietnam to cover areas other than implementation of WTO agreements and commitments Special Considerations Although foreign experiences on the omnibus legislative technique have proved to be positive in implementing international trade agreements, foreign countries do have constitutional and legal frameworks, as well as history, culture and traditions which are different from those of Vietnam. Therefore, a special care and consideration of the factors 6

7 that make the omnibus legislative technique work should be taken in studying foreign experiences before making appropriate proposals and recommendations for Vietnam. Any proposal or recommendation should ensure the feasibility and practicality in Vietnamese conditions, especially the applicability under the current law and practice on legislative works. Importantly, as foreign experiences show the omnibus legislative technique is not the only technique used to develop law and not the substitute for all current legislative techniques Methodology and Approach The Study Paper draws its contents from various smaller independent research papers 5 by the national consultants. The Study uses different research and study methods and techniques, such as survey, analysis and comparison to evaluate the need and possibility of using the omnibus legislative technique in the context of the WTO accession in particular and the development of laws and regulations in other areas of law in general. The national consultants have taken into account the new developments in the legislative area of Vietnam and the new Strategy for The Development of The Legal System to Relevant international and foreign legislative experiences on implementation of international commitments are explored to find the advantages and disadvantages of the omnibus legislative technique before making proposals on the Use of this technique in Vietnam s context. The national consultants have assumed that Vietnam will join the WTO in the second half of 2006 for the purposes of the Study. As a matter of comparison, the national consultants found that the accession commitments of the recently acceded countries are high and higher than those of the WTO founding Members that are at the same development level. This means that Vietnam is likely to have commitments which are not lower than those of the newly-acceded countries and has to prove its ability to implement the commitments in the legal system before joining the WTO. 5 There are three independent research papers covering the following areas: - Analyses and assessments of Vietnam's possible WTO obligations and commitments and the need for use of omnibus legislative technique; - Foreign experiences on using and non-using omnibus legislative techniques for implementation of WTO and other international trade agreements obligations and commitments; - Analyses and assessments of the Vietnam's legal framework on law and regulation making process and other factors related to the possible use of the omnibus legislative tenichque. 7

8 II. FINDINGS 1. Analysis and Assessment of the Current Legal System of Vietnam It is important to start the Study with analyses and assessments of Vietnam s legal system from the WTO perspective. As there was another Study with the Bank s assistance completed in April 2005, this Study focuses only on the new developments from then to the end of Further, since there is a separate study on the compatibility of Vietnamese laws and regulations with WTO requirements, the Study Paper mentions just the key findings to avoid the unnecessary duplication 6. There are the key findings: First, it is very encouraging that since the start of the Doimoi policy, to meet the demands of socio economic development and international integration, the legal system of Vietnam has developed substantially in terms of both quantity and quality of the adopted laws and regulations. It is noteworthy that among the newly adopted laws and regulations, those relate to or implement international commitments and serve the WTO accession has increased most rapidly. One example is that around two third of the laws adopted by the National Assembly in 2005 have direct relations with WTO accession. As the legal review by national consultants shows, in the period of eight months (from the end of the previous Bank assisted review of April-December 2005) the National Assembly and its Standing Committee had passed 32 laws and ordinances (namely two codes, 27 laws and three ordinances). In addition, the Government and ministries had also issued a great number of WTO related under law regulations to implement the new laws and ordinances. Second, the careful review and study by the national consultants show that the contents of the laws and regulations adopted in 2005 have taken into account the implementation of Vietnam s international integration commitments and WTO requirements. This has proved the successful implementation of the Prime Minister s Directive 08/2005/CT-TTG of April 4, 2005 on Advancing the Progress and Quality of Making WTO Related Laws and Regulations in 2005 where the Prime Minister instructed every drafting committee for any bills that would be adopted in 2005 to ensure the conformity of the bills provisions with the WTO requirements. Therefore, as the update legal review for WTO purposes indicates the remaining legislative works are not heavy and manageable. To see more on specific analyses and assessments of the current legal system and laws and regulations in particular areas from the WTO perspective go to the Update Legal Review Report. 2. Implementation of WTO Obligations for Vietnam WTO membership obligations are spelled out in different agreements and legal documents of this organization and may be found in the specific commitments of the Members. 6 See the Update Legal Review Report. 8

9 We all know that there are a great number of WTO legal rules which are very complex and sophisticated to set out the binding obligations of WTO Members in many areas, such at those in trade in goods, trade in services, intellectual property (IP), trade policy review. Therefore, the Study Paper cannot specify all the WTO requirements for a Member. In addition, as Vietnam has not finished its negotiations for the WTO membership by the time of the Paper completion and most of the commitments made by Vietnam have not been made public, the Study is barred from analyzing in depth all the commitments of Vietnam. Instead, the national consultants have to try best looking at the best publicly available information and made educated guess and reference to the experiences of the recently acceded countries. In the above mentioned context, the Paper tries to demonstrate the main WTO requirements for Vietnam and the possible and real commitments Vietnam is making or likely to make. It is speculated that the WTO commitments of Vietnam will be overall on the same level of the recently acceded countries of similar development conditions. Further, the analyses in the Paper work on the assumption that Vietnam will join the WTO in the second half of This assumption on the accession time is made after analyzing various public information, such as views of the former Prime Minister Vo Van Kiet in the article Entry into WTO: Vietnam Missed a Chance 7, time schedule of the WTO agenda, information on possible passage of the bill on granting permanent normal trade relations (PNTR) to Vietnam by the U.S. Congress 8, recommendations made by the U.S. business community for the U.S. Congress to pass the PNTR bill before the summer recess (August 2006) 9 and various public information on the WTO negotiation of Vietnam. But, the assumed accession time may be wrong if Vietnam fails to maintain the current negotiation momentum and its attractiveness for the WTO Members or if other WTO Members do not have goodwill toward Vietnam for the completion of the WTO negotiation by As the Chief Negotiator, Vice Minister of Trade, Luong Van Tu said If the negotiating partners do not have goodwill, they may ask for very high and very difficult membership conditions from Vietnam" WTO Multilateral Requirements and Rules WTO rules are a complex legal regime containing many legal rules governing international trade, which must be implemented virtually by all WTO Members. As the approach of the WTO legal regime is to have general obligations (non-discrimination, reduction of tariffs, elimination of other non-tariff trade barriers, transparency...), but is complicated by having exceptions to the general rules, it is quite difficult to list precisely all WTO requirements for each WTO Member. In addition, the WTO rules should be viewed in their evolutions which may result from the current Doha Development Round of the WTO and dispute resolution mechanism of this organization. In the mean time, one may describe the WTO legal regime as a set of standard trade rules which all WTO Members must accept and apply in their entire territories. The set of 7 Source visited on January 4, Source US-Vietnam Trade Council, visited on January 4, Supra Saigon Economics Time, Issue of 22/12/2005, p

10 rules include the Marrakesh Agreement on the Establishment of the WTO and its annexed agreements. 11 The titles or names of these various agreements are in Annex 1 to this Paper. The scope of coverage of the set of rules are very broad and effect most of the government regulations and measures, at both central and local levels, with respect to trade, investment and IPR. It is noteworthy that although certain WTO agreements contain rules on special and differential treatment for least developed and developing countries, by now all most all the rules are no longer effective or have expired. For the acceding countries, like Vietnam, it is essential to understand the WTO rules on accession and their application to the new Members. The WTO Agreement provides for the accession to the WTO in Article XII. 1. Any State or separate customs territory possessing full autonomy in the conduct of its external commercial relations and of the other matters provided for in this Agreement and the Multilateral Trade Agreements may accede to this Agreement, on terms to be agreed between it and the WTO. Such accession shall apply to this Agreement and the Multilateral Trade Agreements annexed thereto. 2. Decisions on accession shall be taken by the Ministerial Conference. The Ministerial Conference shall approve the agreement on the terms of accession by a two-thirds majority of the Members of the WTO. 3. Accession to a Plurilateral Trade Agreement shall be governed by the provisions of that Agreement. The WTO Agreement Article XII is short and shorter than many other normal WTO articles, but contains many important ideas that can be summarized as follows: - The subjects or entities which may be a WTO Member, are sovereign states or customs territories possessing the right to determine the external trade relations. Therefore, it is understandable that why there are four Chinese entities in the WTO: PRC, Macao, Hong Kong and Chinese Taiwan; - The conditions for entry into the WTO are negotiated and agreed upon by the WTO Members and the acceding countries, and there is no single standard conditions applicable to all; - The WTO accession results in a package of commitments that consist of the WTO Agreement and its annexed agreements (that is referred to as the WTO standard set of rules in this Paper) and the additional conditions and commitments agreed upon by the WTO and the acceding country; - The WTO membership does not automatically result in membership or participation in plurilateral agreements in the WTO; the participation in these agreements are regulated by their separate rules. 11 See "The Legal Texts of the World Trade Organization". 10

11 The real differences of the recent WTO accessions have demonstrated the differences with respect to the accession conditions. These differences are not the results of the changes in the WTO rules, but are due to the accession agreements/protocols reached by the WTO and the acceding countries contain different accession conditions. Experiences of the countries which have recently joined the WTO, such as China, Cambodia and Arabia Saudi show that they had to accept to a large extent to implement all current WTO agreements without any transitional period (with some minor exceptions). In addition, the newly acceded countries have agreed to the commitments which are higher than those of the WTO founding Members having similar development conditions. In the above mentioned context, it is likely that Vietnam will have to accept the implementation of the full current WTO set of rules upon accession. In the best scenario where Vietnam may enjoy some transitional periods for certain obligations, the transitional periods will not be substantial or even are too short to bring any real positive effects for Vietnam. Therefore, one of the immediate works for Vietnam is to prepare best domestic conditions sufficient for the implementation of the WTO obligations upon accession. Among the conditions, the assurance for the conformity of the laws and regulations with the WTO rules is critical. Over the last five years, Vietnam has made enormous efforts to build and improve its legal system to serve the socio-economic development goals, including those of the international economic integration and the WTO accession. With respect to the international economic integration, the Government has adopted plans and programs to review all laws and regulations of the national and local governments and compare them with the requirements of the international economic integration and the WTO. The review efforts have gone through two phases and brought many positive results. For example, to facilitate the WTO accession, the review and analysis of the current laws and regulations with the WTO multilateral requirements (the standard set of rules) have led to the list of laws and regulations which are required to be amended or newly adopted for the WTO compliance. The review results, in turn, have serve well the preparation and development of the legislative agendas of the National Assembly, its Standing Committee and the Government. By the end of the year 2005, almost all laws and regulations which are subject to adjustment, have been adjusted. There are only few outstanding WTO-related bills which are going to be adopted in Further, the legal review has helped Vietnam develop its legislative action plan for the implementation of WTO agreements. The legislative action plan is regularly updated by Vietnam and reviewed by the WTO Working Party at every meeting of the Working Party. These efforts of Vietnam are very encouraging as for many other WTO Members the same works are started or completed only after becoming the Members. So far, Vietnam has provided WTO Members at their requests many newly adopted laws and regulations to facilitate the transparency. However, it may happen that certain Members, on their own interpretation, view that the new legal changes are not sufficient; therefore, press Vietnam for additional legal changes. Although this action by the those Members is hard to be justifiable under the WTO rules (the WTO dispute settlement rules prohibits a Member form having any unilateral action or conclusion other Members laws 11

12 or regulations are inconsistent with the WTO rules and obligations 12 ), Vietnam does not have the right to challenge the action. Therefore, if any WTO Member insists Vietnam to change its laws and regulations to implement WTO obligations, it is very hard and even impossible for Vietnam to refuse. That means to join the WTO in 2006 Vietnam must have a new shortened and more affective way to draft and adopt the relevant legal changes. This is particularly true when the laws and regulations which need to be changed, are not currently being placed in the legislative agenda of the year In above-mentioned context, the national consultants found that the omnibus legislative technique is a perfect option to allow Vietnam to make all the necessary legal changes before it joins the WTO Vietnam's WTO Commitments So far, the final WTO negotiation results and commitments have not been officially made public, although somewhere someone have mentioned the commitments in certain areas. In reality, the bilateral negotiations on market access and multilateral negotiations are still underway. According to the mass media, the WTO Members, especially the U.S., which have not finished bilateral negotiations, have "high demands" 13 from Vietnam. According to the Chief Negotiator, Vice Minister of Trade, Luong Van Tu, the remaining unresolved issues are "all difficult and complex, and highly sensitive for the parties" 14. The WTO membership negotiations should be based on both the WTO rules and the goodwill or willingness of the partners: "If the partners do not have goodwill, they may request Vietnam to accept very high and very difficult accession conditions" 15. Therefore, at this stage, it is impossible to have a full and precise picture of Vietnam's WTO membership obligations. In this context, the Study may only analyze the public information or assumptions and most likely scenario on the WTO commitments of Vietnam. As a result, the analyses and assessments contained in the Study Paper may not reflect all the commitments of Vietnam that come from the on-going negotiations. In the Study, the national consultants make an educated guess that Vietnam may join the WTO in the second half of The time is very important factor as 2006 is the year set by the WTO to finish the Doha Round. To analyze the WTO commitments of Vietnam, it is important to learn the commitments of the most recent WTO Members. It is interesting that the person who has signed the U.S.BTA on behalf of the U.S. commented that the price that Vietnam should pay for the WTO membership "cannot be lower than the price China has paid" 16. This means that if Vietnam wants to join the WTO in the second half of 2006, it should be prepared to accept the WTO commitments which are not lower than those accepted by 12 DSU Article See the articles on Vietnam's entry into the WTO in the website December See Saigon Economic Time, 22/12/2005, p. 12 quoting the comments of the Vice Minister Luong Van Tu. 15 See article " No Time Set for WTO Entry", Supra. 16 Former USTR Charlene Barshefsky, Source!, December 13,

13 China five years ago. The situation would be worse if Vietnam fails to join the WTO in 2006 when the Doha Round is set to be completed and the membership price would be WTO plus. The analysis here tends to indicate that Vietnam's WTO commitments will be high and require, as a consequence, further legal adjustments to implement the commitments in the legal system. Under the 2005 Law on Conclusion, Accession and Implementation of International Treaties (the Treaty Law) the agreements between Vietnam and the WTO Members are Vietnam's "international treaties" which can be directly applied in whole or in part, or be transformed into Vietnamese law for implementation 17. Given the current conditions of Vietnam, the government s recent moves and the pressure from the WTO on Vietnam to reform and transform WTO obligations into domestic law, it is unlikely that WTO agreements and commitments will be directly applied in Vietnam without corresponding domestic law 18. According to the official public information of the WTO, Vietnam has made a number of multilateral commitments to implement WTO agreements 19. Vietnam's Chief Negotiator confirmed in the last tenth Meeting of the Working Party on Vietnam's WTO Accession held September, 2005: "So far, Vietnam has committed to implement fully upon accession the following agreements:... Agreement on TRIPS..., TRIMS Agreements, CVA Agreement, TBT Agreement, SPS Agreement, Import Licencing Procedure Agreement, Agreements on AD and CVD and Agreement on Rules of Origin". The information shows that Vietnam has accepted to implement immediately a number of important WTO agreements without any transitional period. This should be read together with the fact that there are other WTO agreements or rules which are considered to be "non-negotiable" and Vietnam, like any other Members, must automatically accept them in full, such as the WTO Agreement, the DSU on dispute settlement mechanism, most of the GATT and GATS. So, one may conclude that basically, by now Vietnam has accepted all most all WTO multilateral rules (excluding the plurilateral agreements) upon accession 20. This seems to be "unfair" for Vietnam according to some people. But, a careful look at and analysis of the issue tend to demonstrate that it is hard to challenge the unfairness and more importantly, the WTO rules and practice are fully observed. Although Vietnam is a developing country and a so called transitional economy and should have enjoyed special and differential treatment (S&D), especially the transitional periods for implementation certain obligations (applicable to the WTO founding Members of the same development level), all most all the transitional periods have expired. There is no WTO rules on automatic grant of such 17 Treaty Law, Art See the separate paper on the impacts of the Treaty Law on WTO legal implementation. 19 See visited 21/10/ Although the Study was conducted substantively in December, 2005 and January and February, 2006, the analysis and findings by the national consultants on the commitments of Vietnam are precise with the views of the recent information disclosed by the Deputy Chief Negotiator in Vietnam Investment Review dated 10/3/2006, Issue 30. It is confirmed that "...so far, the main multilateral commitments of Vietnam include the full implementation of important WTO agreements upon accession..." 13

14 period for the acceding countries, rather the periods, if granted, must be negotiated and agreed by the WTO. The accession experiences of the recent Members show that they, generally, have not been given such privileges with rare exceptions. Even where the transitional periods are granted, it is hard to see any real meaningful benefits for the acceding countries as the transitional periods are often too short or are "trade-off" for other too high commitments. From the perspective of bilateral negotiation for market access, according to the Chief Negotiator of Vietnam "Vietnam has committed to open up the market at the level which is higher than the level of all most all recently acceded countries and is much higher than the level of the [founding] WTO Members of the development level" 21. The comment is made by the negotiator when the market access commitments have not been made public; therefore, it is hard to interpret it as it may be viewed as a negotiation technique. So, at this state the national consultants found no precise picture of the specific bilateral market access commitments of Vietnam and other so called "WTO plus" commitments. Given the fact that the remaining issues are all difficult and sensitive, one may speculate that if Vietnam accepts the remaining issues requested by the partners, a natural consequence will be additional legal adjustments to implement the accepted issues. In addition, even for the bilateral market access commitments that have been accepted by Vietnam in concluding bilateral talks with trade partners, the consolidation of the commitments are not easy and may technically increase the level of commitments under the MFN rules. To have certain understanding of the possible WTO commitments of Vietnam, the national consultants used the experiences of other recent Members, including those of China. The U.S.-Vietnam Trade Council (USVTC) published on its website a chart comparing the level of commitments of the 10 recent Members, including China 22. But, it is to note that there is a big difference between Vietnam and those Members on the fact that those Members, unlike Vietnam, are not required to reform all their laws and regulations as a precondition for joining the WTO. As the U.S.VTC s comparison on those 10 countries is informative enough, the Study focused on the WTO commitments of the Arabia Saudi, which joined the WTO in the end of The Saudi's commitments may be a good WTO membership "benchmark" for the developing countries. Saudi applied for the membership (at that time GATT contracting party" in July 1993 and succeeded in 2005 after 12 years of negotiation. It is important to look at the summary of Saudi's commitments produced by the WTO. 24 "...As a result of the negotiations, Saudi Arabia has agreed to undertake a series of important commitments to further liberalize its trade regime and accelerate its integration in the world economy, while offering a transparent and predictable environment for trade and foreign investment in accordance with WTO rules. Among the commitments undertaken by Saudi Arabia are the following: 21 visited on October 21, ! ""!!!". 23 The information on Saudi Arab is obtained from the source visited on November 14, visited on March 22,

15 The WTO Agreement will be applied uniformly throughout Saudi Arabia s customs territory. Saudi Arabia agreed to review a fee charged for the authentication of trade documents and to bring it into conformity with WTO rules within two years of accession. Saudi Arabia will eliminate any non-tariff measures that cannot be justified under WTO rules while maintaining the right to restrict the importation and exportation of a certain number of goods and services in order to protect public morals, the life and health of the population, national security interests, etc. In addition, Saudi Arabia has agreed to review the list of banned imports at least once a year and to remove items the importation of which would not compromise the legitimate objectives of the Kingdom. Saudi Arabia will not maintain any export subsidies on agricultural products. Saudi Arabia will ensure that its producers and distributors of natural gas liquids (NGLs) will operate on the basis of normal commercial considerations, based on the full recovery of costs and a reasonable profit. In areas such as the protection of intellectual property rights, the application of technical regulations and standards, as well as the protection of food safety and human, animal and plant life and health, Saudi Arabia will implement the relevant WTO Agreements in full from the date of accession (i.e. the Agreement on Trade-Related Aspects of Intellectual Property Rights, the Agreement on Technical Barriers to Trade and the Agreement on the Application of Sanitary and Phytosanitary Measures). GOODS With the conclusion of market access negotiations on goods, Saudi Arabia committed to gradually lowering trade barriers and expanding market access for foreign goods. Saudi Arabia has bound all tariffs levied on imports. At the end of the ten year implementation period, average bound tariff levels will decrease to 12.4 and 10.5 per cent for agricultural and non-agricultural products respectively. The individual tariff rates for agricultural products will range from 5 to 200 per cent, with the highest rates being applied to tobacco products and dates. Some 11 per cent of non-agricultural products will be imported duty-free whereas the highest tariff rate will affect wood, as well as iron and steel products. Most tariffs (92.6 per cent) will be set at their final bound rates at the date of accession. The remainder will mostly be implemented in 2008 and 2010, but in no case later than SERVICES Insurance Foreign insurance companies will be permitted to open and operate direct branches in Saudi Arabia. Commercial presence will also be permitted for insurers that establish a locally incorporated cooperative insurance joint-stock company, in which foreign participation is limited at 60 per cent. A three-year transition period will be given 15

16 to existing foreign insurance providers to convert to either a Saudi cooperative insurance company or to a direct branch of a foreign insurance company. During this transition period, existing foreign insurance providers will be able to continue existing business operations, as well as offer new products and service new clients. Banking Commercial presence of banks will be permitted in the form of a locally incorporated joint-stock company or as a branch of an international bank. Upon Saudi Arabia s accession, the foreign equity cap for joint ventures in banking will be increased to 60 percent. While financial services can only be provided by commercial banks, asset management and advisory services may also be provided by non-commercial banking financial institutions. Telecoms Within three years from accession, Saudi Arabia s commitments will allow up to 70 percent foreign equity ownership in the telecommunications sector. These commitments apply to both basic telecommunication services and value-added telecoms services. Public telecommunications services will have to be provided by a joint-stock company. Distribution While Saudi Arabia will maintain some restrictions on the distribution of goods inside the country, these restrictions will be phased out over a three-year transition period." In short, from the above analyses and findings, the national consultants predict that it is likely that Vietnam will accept high WTO commitments. On the multilateral area, Vietnam has committed to implement all most all WTO rules upon accession without transitional periods. With respect to the bilateral negotiations, it is unlikely that Vietnam will have market access commitments which are lower than those of China and Saudi Arabia. In other words, it is more likely that Vietnam's commitments will be in overall the same as those of China and Saudi Arabia. Certain so called "WTO plus" commitments will likely be accepted by Vietnam as a compromise for the membership. 3. Foreign Experiences on Using the Omnibus Legislative Technique for Implementation of WTO and Other International Trade Agreements The national consultants have studied the experiences of a number of countries which have used the omnibus approach and of those which have not used the omnibus approach to implement WTO and other international trade agreements. One general observation is that the Use or non-use of the omnibus approach in other countries depends on many factors and even there are variations of the omnibus approach in the countries using the approach The United States In the U.S., the WTO agreements were implemented in the domestic legal system through the Uruguay Agreement Act (the URAA) by the Congress in The Act is a complete package that contains all relevant changes of domestic laws required by the WTO obligations (the omnibus approach). The omnibus approach has been widely used for 16

17 implementation of various international trade agreements in the U.S., such as the U.S.- Canada FTA, NAFTA and different agreements concluded in previous rounds of the GATT. The omnibus approach has many advantages as it requires the draft and adoption of only one bill to implement all the commitments; therefore it saves time and unnecessary repetition of legislative procedural steps and formalities which would be applicable to the situations where various individual bills are drafted and adopted. On the policy side, the omnibus approach allows a "balance" or "compromise" of different interests which are related to (or even sometimes not related to) the implementation of international trade commitments. In addition, the approach allows the approval of difficult and sensitive issues (as a part of the package), which otherwise (as put in a separate bill) hard to be approved. In the U.S., the drafting of an omnibus trade bill is chaired by the U.S.TR, which leads the drafting process but with active participation of various ministries and agencies, such as Commerce, Justice, Treasury, Agriculture... Basically, the U.S. maintains the participation of those who have involved in the negotiation of the trade agreement in the drafting of the bill. That means the inter-agency mechanism set up for the negotiation is used for the drafting of the trade bill after the trade agreement is concluded. This also demonstrates that in fact the lead agency, the U.S.TR acts as the focal point and is responsible for the overall drafting process, but the actual drafting of specific rules is very much the responsibility of the line ministries and agencies. According to the view of certain US experts, this ways of working allows the combination of the collective strength and the expertise and competence of the relevant ministries in negotiating and implementing trade rules. In case of different views between the involved agencies in the drafting process with respect to the interpretation or understanding of a rules, every efforts are made at the expert level to solve the differences. If no agreement is reached at the expert level, the matter should be brought to the higher level of government, but this happens very rarely as the U.S. has acquired many experiences for this kind of work. In drafting an omnibus trade bill the drafting agency maintains a close consultation and coordination with relevant committees of the House (Ways and Means Committee has primary responsibility) and Senate (Finance Committee has primary responsibility). Although all relevant committees make comments on the bill, the two lead Committees have the overall responsibility for the bill, which normally requires the approval of the Committees before being introduced to the floor. Before the bill is officially introduced to both houses, the Administration seeks the views of the legislators and those of the majority and minority groups to evaluate the likelihood of approval of the bill by the houses. Although the communications between the Administration and Congress are unofficial, they are very important as the omnibus bill is to be passed under a separate procedure: the Congress may say yes or no to the bill, but may not ask the Administration to change the bill contents. Therefore, for all omnibus trade bills used to implement international trade, the Administration has to seek the views of the legislators on the bills before it introduces the bills to the houses in order to ensure the positive support for the bills. 17

18 A full set of documents related to an omnibus bill on implementation of international trade agreement consists of three main documents: the Statement of Administrative Action where the Administration briefs key provisions of the agreement and its views; the bill containing all the necessary legal changes; and the agreement. The documents provides congressmen with sufficient information to vote on the bill. It is interesting that after the bill is adopted, all the three documents are made public to facilitate the implementation. In the bill, different provisions may have different dates of legal effect, depending on the international commitments and other considerations. The provisions on effective dates in the bill may be set in either ways: to have a provision effective date right in each substantive rule or section or to have only one article cover different effective dates for various substantive provisions of the whole bill. With respect to the bill structure, the URAA is divided into eight titles which cover many issues both related and unrelated to the Uruguay agreements implementation: five first titles are designed to implement US international trade commitments in the WTO and three last titles have nothing to do with the WTO are the results of the compromise made by different interest group of Congressmen. After the bill is adopted, a separate unit within the Congress and other private publishing houses incorporate the adopted legal changes into the corresponding existing acts. The U.S. has a long history of using the omnibus bill approach for different legislative purposes in many areas, but the most notable experience is shown through the implementation of the U.S. international trade agreements. For the U.S. the drafting and approval of such a bill does not cause any technical difficulties Canada In Canada, international agreements are not directly applicable and do not automatically become a part of the domestic law without legal transformation. As the Parliament has the supreme legislative powers of the nation, if an agreement requires a legal changes, an enactment must be made by the Parliament. Canada apply the omnibus approach to implement international trade agreements. And like the U.S., the omnibus bill in Canada is supposed to be the complete package of all necessary legal changes for the implementation of the agreements. The omnibus approach has been used for the implementation of Canada's commitments in NAFTA and WTO. For instance, to implement the WTO agreements, Canada passed the Act to Implement the Agreement Establishing the World Trade Organization (42-43 Elizabeth II, 15/ 12/ 1994) (the WTO Act). The Act has modified 23 other existing acts of Canada to ensure its compliance with the WTO obligations. So, all the WTO agreements have been implemented by Canada in its legal system by adopting one bill - the WTO Act 25. The Act entered into legal force on January 1, Further, certain under law regulations which were required to change for the WTO implementation purposes, have also been issued. This work is not difficult in Canada as all the proposed under law regulations must be approved by the Government/Cabinet. A matter of 18