On January 11, 2007, the WTO recognized Vietnam as the 150th official member of the world’s largest trade organization.

After 15 years of membership in the WTO, Vietnam has made great achievements and has opened up new opportunities for long-term and sustainable development. For example, in 2006, the import-export turnover was 39.6 billion USD, while in 2022 this figure is expected to reach 700 billion USD, an increase of 17 times compared to 2006. As a result, the Director-General of the WTO assessed Vietnam as one of the 30 most successful WTO members. From a deficit country, Vietnam has become a surplus exporter in recent years due to strong economic development. Additionally, as of November 2022, despite global political turmoil and recession, Vietnam recorded a trade surplus of more than 10 billion USD and attracted more than 25 billion USD in FDI, a 15% increase over the same period last year.

Legal value of the WTO Schedule of Commitments

Clause 5, Article 156 of the 2015 Law on Promulgation of Legislative Documents stipulates: “Application of Vietnam’s legislative documents must not obstruct the implementation of the international agreements to which the Socialist Republic of Vietnam is a signatory. In case Vietnam’s legislative documents, other than the Constitution and an international agreement to which the Socialist Republic of Vietnam is a signatory, contain different regulations on the same issue, the international agreement shall apply.”

Thus, except for the Constitution, Commitment No. 318/WTO/CK of Vietnam and the WTO on services (the WTO Schedule of Commitments), which is an international agreement, has a higher priority than other legal documents in Vietnam. The WTO Schedule of Commitments indicates the level of openness and predictability for foreign investors from other WTO member countries when entering the Vietnamese market. Properly understanding and applying the WTO Schedule of Commitments is an important factor for foreign investors when pursuing the necessary legal procedures to register their investment in Vietnam.

Basic contents of the WTO Schedule of Commitments

The WTO Schedule of Commitments consists of three parts: general commitments, specific commitments, and a list of exemptions from most favored nation treatment (MFN).

  • General commitments: Includes commitments that are generally applicable to all service sectors and sub-sectors in the Schedule of Commitments. This part mainly deals with general economic – commercial issues such as regulations on the investment regime, forms of business establishment, land leases, tax measures, subsidies for domestic enterprises, and other related matters.
  • Specific commitments: Includes commitments applicable to each category of service included in the Schedule of Commitments. Each service listed in the Schedule of Commitments, such as telecommunications services, insurance services, banking services, transportation services, and others will have specific commitments applicable to that service.
  • The list of exemptions from most favored nation treatment: Reserved for violations of the MFN principle for services. Under the 1, a member is in violation of the MFN principle if it has included the infringing measure in the list of exemptions from most favored nation treatment and is accepted by WTO Members.

Modes of delivery provision in the WTO Schedule of Commitments

GATS stipulates 4 modes of delivery, including: (1) Cross-border supply; (2) Consumption abroad; (3) Commercial presence; and (4) Presence of natural person. In which mode (3) commercial presence is the relevant mode regarding the field of foreign investment in Vietnam.

Specifically, according to mode (3): Foreign investors (from a WTO member country) are entitled to establish forms of presence in Vietnam such as establishing companies, joint ventures and branches as well as contributing capital to a company with 100% foreign capital.

For example: A US bank may establish a branch to do business in Vietnam, or foreign investors (individuals or organizations) may establish FDI companies with 100% contributed capital in Vietnam.

Currently, Vietnam’s commitments in the WTO Schedule of Commitments are divided into industry sectors with various levels including:

  • Full commitment: A commitment not to apply measures to limit market opening or nationalize the sector (i.e. to completely open the industry to foreign investment in Vietnam).
  • Commitments with restrictions: Vietnam consents to open the market in one or more service industries, but lists in the corresponding columns of the Schedule of Commitments certain restrictive measures applicable to foreign investors.
  • No commitments: Viet Nam restricts market access and retains the right to nationalization in one or more specific modes of service delivery.

For service industries that are not committed in the WTO Schedule of Commitments:

Due to the specificity, importance, and influence of a number of industries on Vietnam’s economy and society, Vietnam has not committed to opening the market to all service industries in the WTO Schedule of Commitments.

For industries which Vietnam has not committed to opening the market or are not specified in the WTO Commitments Schedule, the specific form and level of opening of those industries will be decided and stipulated by Vietnam.

Example 1: For real estate brokerage services, although Vietnam has not made a commitment in the WTO Schedule of Commitments, foreign investors may still invest and do business in this industry in Vietnam according to Article 60 of the 2014 Law on Real Estate Business.

Example 2: For publishing services, Vietnam has not made a commitment in the WTO Schedule of Commitments. Further, Article 12 of the 2012 Law on Publishing stipulates that FDI companies that do not belong to agencies and organizations are not allowed to establish publishing services.  As such, foreign investors are currently not allowed to invest in this industry in Vietnam.

SOME FREQUENTLY ASKED QUESTIONS ABOUT THE WTO SCHEDULE OF COMMITMENTS:

Q: What is the CPC code in the WTO Schedule of Commitments?

A:

The CPC code is an abbreviation of the phrase: PROVISIONAL CENTRAL PRODUCT CLASSIFICATION: The United Nations’ central product classification system. Investors, when carrying out investment registration procedures in Vietnam, need to compare the industry they want to invest in with each CPC code in the WTO Schedule of Commitments.  Then, this CPC code must be converted to the VSIC industry code in the system of economic sectors of Vietnam promulgated in Decision 27/2018/QD-TTg of the Prime Minister.

Q: Is the manufacturing industry committed in the WTO Schedule of Commitments?

A:

The WTO Schedule of Commitments only commits to service industries, not to manufacturing industries. However, though not committed in the WTO Schedule of Commitments, Vietnam is currently encouraging foreign investors to invest in manufacturing industries if production projects fully meet the conditions on investment location, environment, financial ability and other requirements.

Q: In case the investor is from a country that is both a member of the WTO and a member of another trade agreement such as the CPTPP, which regulations should be applied by the investor if there is a difference between them?

A:

Because the WTO Schedule of Commitments and the CPTPP Agreement are the same international agreements, they have the same priority in order of application. In this case, foreign investors can choose to combine both or choose one of the two international agreements mentioned above (if there is any conflict) to best suit their investment objectives in Viet Nam.

Above is an article by LeTran about the role and basic content of the WTO Schedule of Commitments.

If you have any questions, please contact our experienced attorneys at letran@corporatecounsels.vn


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  1. GATS[1]
  2. GATS: The full name is the General Agreement on Trade in Services – an agreement within the WTO framework that regulates issues on trade in services between WTO members.