MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY ------------------------- DISSERTATION VIETNAM'S COMPETITION POLICY AND LAW: EMERGING ISSUES IN IMPLEMENTING EVFTA COMMITMENTS Major: International Trade Policy and Law PHAM THI THU HA Hanoi – 2020 Luan van MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY DISSERTATION VIETNAM'S COMPETITION POLICY AND LAW: RECOMMENDATIONS FOR IMPLEMENTING EVFTA COMMITMENTS Major: International Trade Policy and Law Full Name: PHAM THI THU HA SUPERVISOR: Assoc. Tang Van Nghia Hanoi – 2020 Luan van DECLARATION I hereby declare that this master thesis is the scientific research of my own which made on the basis of theoretical studies and under the direction and supervision of Prof. Tang Van Nghia. The research contents and results of this thesis is completely honest.
These data and documents for the analysis, review and evaluation were collected from various sources which are fully listed in the reference list. I am fully responsible for the content of this master thesis as well as this declaration.s Hanoi, March 23rd, 2020 PHAM THI THU HA Luan van ACKNOWLEDGEMENT One year and 6 months in Foreign Trade University has come and gone. It is my pleasure to become a part of Master’s of International Trade Policy and Law, Intake 6, where I had a chance to meet many interesting and unique friends as well as many enthusiastic and world class professors in the field of international trade and law. Thanks, Foreign Trade University (FTU), I was able to experience a totally different academic environment from other school, which is worth to spend my time and challenge myself.
First, I would like to express my sincere gratitude to my supervisor, Assoc. Tang Van Nghia, Dean of Faculty of Graduate Studies of the Foreign Trade University for his enthusiasms, patience and support from the beginning to finishing of my master thesis. With his numerous years of experiences and profound knowledge, he has always given me helpful advices whenever I crashed into a dead end. Besides this, I want to express my thankfulness to my entire classmate, especially to become a part of my student life.
Hope that everyone will be successful and be happy in the future. Finally, it will be missing without mentioning on the encouragement and support of my husband, my family, and my best friends who has supported me from the beginning until the end of this thesis. Thank you my managers and colleagues in MPP, Vietnam Japan Universiy – for always giving me favorable conditions for me to complete this scientific research. Thank you, for always stay by my side and encourage me.
Luan van TABLE OF CONTENTS ACKNOWLEDGEMENT.4 Table of contents. i LIST OF ABBREVIATIONS. iv LIST OF TABLES .v LIST OF FIGURES. vi LIST OF BOX(PRACTICAL CASE).
vii SUMMARY OF THESIS RESEARCH RESULTS. Research objectives & Research questions. Scope of Research. FUNDAMENTALS OF COMPETITION, AND COMPETITION LAW AND POLICY .1 The concept of competition.
Fundamentals of Competition Policy and Law .1 Competition Law and Competition Policy .2 Scope and links of competition law with other policies .3 Objectives of competition policy .4 Contents of Competition Policy. INTERNATIONAL COOPERATION OF COMPETITION POLICY .1 Importance and history background of international co-operation in competition policy. Current situation of international cooperation of competition policy. Competition related provision in FTAs .1 Rationales for including Competition-related Provisions in FTAs 16 Luan van ii 3.
Typology of Competition-related provisions in FTAs. COMPETITION POLICY IN EVFTA. Introduction to EVFTA .2 Potential macroeconomic implications of the EVFTA to Vietnam .3 Coverage of Competition policy in the EVFTA .4 Content of competition -related provisions in EVFTA.1 Promoting competition &Adopting and maintaining competition laws proscribe anti-competitive business conduct .2 Procedural fairness and transparency .3 Regulating designated monopolies and state-owned enterprises .4 Regulating subsidies/state aid .5 Co-operation and co-ordination on competition .6Dispute settlement mechanisms for conflicts on competition .OVERVIEW ON VIETNAM’s COMPETITION LAW AND POLICY REGIME. Vietnam Competition Legislation .1 Over view of Vietnam Competition Legistration .2Scope of application .3 Agreement on restraint of competition policy .4 Abuse of dominance .6 Unfairs competitive practices .7 Competitive authorities agencies .2 Enforcement of Competition Policy in recent years .2 Investigation of competition restriction cases .3 Investigation and handling of unfair competition cases .4 Controlling violation of economic concentration .70 Luan van iii CHAPTER 6: RECOMMENDATIONS FOR REFORMING COMPETITION LAW AND POLICY AND ENFORCEMENT IN VIETNAM IN ACCORDANCE WITH COMMITMENTS IN EVFTA.
Improving provisions in VietnamCompetition Law in accordance with commitments in EVFTA .1 Interpretation of term: need to be improved .2 Requirement for consistency of Vietnam legal system .3 Improve provisions to control effectively economic concentration 73 6.4 Provide an incentive and transparent leniency program as an instrument to tackle core cartel (OECD, 2015) .2 SOEs and competitive neutrality issues in setting a transparent competition enviroment .3 Debt neutrality and outright subsidies .3 Maintain an independent and well resourced competition authority with the necessary powers to effectively enforce competition law .1 Complete draft decree which prescribes the functions, tasks, powers and organizational structure of the competition authority.2 Build financial resource to boost capacities for Vietnam’s young competition authorities .3 Build human resource to boost capacities for Vietnam’s young competition authorities. Strengthen cooperation between competition authories of both Parties .83 LIST OF REFERENCES. iv Luan van iv LIST OF ABBREVIATIONS Abbreviation Meaning Art. Article CPL Competition Policy and Law EVFTA European Union - Vietnam Free Trade Agreement FTAs Free trade agreements ICN International Competition Network MOIT Ministry of Industry and Trade NCC National Competition Committee OECD Organization for Economic Cooperation and Development RTAs Regional Trade Agreement SOEs State owned enterprises Luan van v LIST OF TABLES Table Page Table 1: Experience with International Co-operation in Enforcement, 15 by Enforcement Area (2007-2012) Table2: Summary outline of EVFTA 27 Table 3: Brief characteristics of state-owned enterprises, enterprises granted special rights or privileges, and designated monopolies in 33 EVFTA Table 4: Budget for operation of competition authorities in 2016 in 78 some chosen countries Table 5: comparison between countries in the world on the size of 80 the competition agency's personnel in 2016 Luan van vi LIST OF FIGURES Figure Page Figure 1: Four elements of competition policy must be considered to 7 promote a market-oriented economy Figure 2: Relationship between competition law, competition policy 9 and economic development Figure 3: Types of Competition-related Provisions in FTAs 18 Figure 4: Review Timeline between Vietnam Competition Law 48 2004& 2018 Figure 5 : Statistics of competition restriction case during 2006-2018 69 Figure 6 : Statistics on unfair compeitition case from 2009-2018 69 Luan van vii LIST OF BOX(PRACTICAL CASE) Box Page Box 1: Motor Vehicle Insurance 46 Box 2: Vinapco’s Abuse of Monopoly in the Aviation Fuel Market 51 Box 3: Vietnam Regulator Finds Grab/Uber Acquisition 55 Potentially Infringes Law on Competition Box 4: Merger between Viettel and EVN telecom 59 Box 5: Merger between the Vietnam National Financial Switching 60 Joint Stock Company and Smartlink Card Services Joint Stock Company Box 6: A Nguyen Trading’s direct comparison of products 62 Luan van viii SUMMARY OF THESIS RESEARCH RESULTS In the past several decades, Competition Policy and Law (CPL) is an important tool to promote fair competition and make markets work more efficiently, particularly in the context of integration with the global economy.
From 2004, by enacted Competition Law 2004 and issues relevant policies, the Government of Vietnam had step by step enhanced CPL to achieve effective competition and protect customer rights. Participations in many new-generation of RTAs and FTAs such as : CPTPP, EVFTA…, the Government of Vietnam has to prepare an over- arching competition policy reform including the role of the state-owned sector, anticompetitive regulations and the reform of the competition law to ensure effectiveness for its commitments. Together with the new 2018 Law on Competition comes into force from 1 July 2019, preparing relevant enclosed documents, Viet Nam is on the way to address the following emerging issues of international cooperations in the context of EVFTA commitments. The contributions of this work are presented as follows: Firstly, analyzing three major theoretical and conceptual frameworks: the concept of competition; the relationship between competition policy, competition law and economic development; and objectives of CPL.
Then, scrutinizing how CPL regulates the anti-competition context of globalization, particularly in the formality of provisions in free trade agreements. The systematic and theoretical analysis above is required for more detail to assess whether Vietnam has comprehensive legislation on competition that proscribes anti-competitive conduct, or prohibits the anti-competitive conduct by a dominant firm and provides the necessary enforcement tools to uncover such illegal practices; (e. leniency programs, investigative powers, etc.) or enough to power to take appropriate action with respect to such conduct to ensure these objectives or not (?). After confirming the findings of shortcomings or even loopholes in competition policy in Vietnam, the dissertation will propose recommendations to Luan van ix improve an effective legal framework, an independent and well-resourced competition authority, a healthy competition enviroment for a well-preparation toward EVFTA.
Luan van CHAPTER 1. Research Rationale Competition policy today also needs to take account of the growth in trade. As border barriers - tariffs - have decreased and market access was improved, firms are increasingly engaged in conducting their activities across borders. Recent theoretical developments have revealed that anti-competitive behaviors behind borders can reduce or prevent the potential gains made in the area of market access.
CPL, if appropriately designed and effectively implemented in keeping with the economic, social and environmental circumstances in a country, is expected to complement other government policies in achieving sustainable and inclusive growth and development, through the elimination and deterrence of anticompetitive practices. In most developed countries in the world, competition policy serves as an instrument to “encourage industrial efficiency, the optimal allocation of resources, technical progress and the flexibility to adjust to a changing environment”. Since the last few decades, anti-competitive practices tended to be considered mainly as a domestic phenomenon, most facets of competition law enforcement currently have an important international dimension. Upon that, the dramatic rise within the range and importance of bi-lateral free trade agreements (FTAs) recently such as has certainly developed and emerging nations alike with a more and more well-liked popular route for promoting competition within the international trade arena.
Provisions on competition policy in FTAs and RTAs facilitate a foreseeable, facilitative business environment. Through such provisions, the benefits of free trade are not undermined by behind the border public or private sector actions. A challenging problem that arises in this domain is how to take advantage of these provisions because the difference between legislation system, the economy of each party. On June 30th, the EU - Vietnam has officially signed the Free Trade Agreement (EVFTA).
With 17 chapters, two protocols and numerous connected memorandums with essential contents including trade in goods, services, investment, trade defense, competition, state enterprises, government procurement, intellectual property, trade Luan van 2 and sustainable development, legal and institutional issues, the EVFTA is considered a comprehensive, high-quality agreement that ensures a balance of benefits for both Vietnam and the EU. EVFTA contains a whole chapter controlling competition policy with detail and practical regulations. It synchronizes the anti-trust law of member countries and elevates them to provide the most useful environment for competition to develop in the whole organization. With the socialist-oriented market economy, competition environment in Vietnam should bring about the best conditions for enterprises to grow, for consumers to benefit and for social welfare to gain.
It’s necessary for Vietnam to give a crucial research on how to implement accurately and effectively the competition-related provisions of this agreement before the effective date (expected around June 2020). Against the context of there has been less previous evidence for an official research on competition related provision of EVFTA currently, the topic “ Vietnam's competition policy and law: Emerging issues in implementing EVFTA commitments” is chosen.