On 5 October 2015, the United States and 11 countries in the Pacific Rim, including Vietnam, which have been negotiating the Trans-Pacific Partnership (TPP), announced that the terms of the groundbreaking treaty had been reached. Vietnam is generally considered to be one of the nations that stands to gain the most by acceding to the TPP. Its economy will be further liberalised through TPP membership and, in particular, foreign investors in the manufacturing and financial services sectors are optimistic that TPP membership will further open Vietnam's market beyond its WTO commitments. What is the process for Vietnamese ratification of the TPP, and when can we expect this to occur?
Ratification and implementation of an international treaty in Vietnam is regulated by the Law on Conclusion, Accession, and Implementation of Treaties, dated 16 June 2005 (the “Law on Treaties”). A treaty may be executed by either the Government or the State, and different procedures would apply depending on the executing body. Based on the Law on Treaties, we expect that the TPP would be executed by the Government.
Under the Law on Treaties, the President has the right to ratify a treaty himself, or to submit the treaty to the National Assembly for ratification. Given the importance of the TPP and the broad media coverage of the negotiations process, it is likely that the President will submit the TPP to the National Assembly for ratification. Ratification by the National Assembly is a three step process:
- The TPP first needs to be verified by the Foreign Affairs Committee of the National Assembly (the “Committee”). The Committee will conduct a meeting to verify the TPP within 15 days from the date it receives the TPP documents. After its meeting, the Committee will submit a report on the verification of the TPP to the National Assembly.
- The National Assembly will ratify the TPP by a resolution at its next working session.
- The President will then issue an order promulgating the ratifying resolution of the National Assembly.
The Ministry of Foreign Affairs will notify the depository of the ratification of the TPP within 15 days from the date the President issues the promulgating order. A plan for implementing the TPP in domestic legislation will then be prepared and submitted to the Prime Minister for approval.
Vietnamese media has reported that the National Assembly may ratify the TPP during its working session at the end of this year. If so, Vietnam may be able to notify the depository in early 2016 and prepare for implementing TPP domestic legislation shortly thereafter.
May 252023Global Financial Markets Podcast