I. What does FTA mean?

A free trade agreement is a pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange. The concept of free trade is the opposite of trade protectionism or economic isolationism.

II. How can a free trade agreemnet work?

In the modern world, free trade policy is often implemented by means of a formal and mutual agreement of the nations involved. However, a free-trade policy may simply be the absence of any trade restrictions. A government doesn't need to take specific action to promote free trade. This hands-off stance is referred to as “laissez-faire trade” or trade liberalization. Governments with free-trade policies or agreements in place do not necessarily abandon all control of imports and exports or eliminate all protectionist policies. In modern international trade, few free trade agreements (FTAs) result in completely free trade.

For example, a nation might allow free trade with another nation, with exceptions that forbid the import of specific drugs not approved by its regulators, or animals that have not been vaccinated, or processed foods that do not meet its standards.Or, it might have policies in place that exempt specific products from tariff-free status in order to protect home producers from foreign competition in their industries.

IiI. The View from Financial Markets about Free Trade Agreement:

Not surprisingly, the financial markets see the other side of the coin. Free trade is an opportunity to open another part of the world to domestic producers. Moreover, free trade is now an integral part of the financial system and the investing world. American investors now have access to most foreign financial markets and to a wider range of securities, currencies, and other financial products. However, completely free trade in the financial markets is unlikely in our times. There are many supranational regulatory organizations for world financial markets, including the Basel Committee on Banking Supervision, the International Organization of Securities Commission (IOSCO), and the Committee on Capital Movements and Invisible Transactions.

IV. Real-World Examples of Free Trade Agreements

The European Union is a notable example of free trade today. The member nations form an essentially borderless single entity for the purposes of trade, and the adoption of the euro by most of those nations smooths the way further. It should be noted that this system is regulated by a bureaucracy based in Brussels that must manage the many trade-related issues that come up between representatives of member nations.

V. What are intellectual property rights?

ntellectual property rights are customarily divided into two main areas:

(i) Copyright and rights related to copyright.

The rights of authors of literary and artistic works (such as books and other writings, musical compositions, paintings, sculpture, computer programs and films) are protected by copyright, for a minimum period of 50 years after the death of the author.

Also protected through copyright and related (sometimes referred to as “neighbouring”) rights are the rights of performers (e.g. actors, singers and musicians), producers of phonograms (sound recordings) and broadcasting organizations. The main social purpose of protection of copyright and related rights is to encourage and reward creative work.

(ii) Industrial property.

Industrial property can usefully be divided into two main areas:

One area can be characterized as the protection of distinctive signs, in particular trademarks (which distinguish the goods or services of one undertaking from those of other undertakings) and geographical indications (which identify a good as originating in a place where a given characteristic of the good is essentially attributable to its geographical origin).

The protection of such distinctive signs aims to stimulate and ensure fair competition and to protect consumers, by enabling them to make informed choices between various goods and services. The protection may last indefinitely, provided the sign in question continues to be distinctive.

Other types of industrial property are protected primarily to stimulate innovation, design and the creation of technology. In this category fall inventions (protected by patents), industrial designs and trade secrets.

The social purpose is to provide protection for the results of investment in the development of new technology, thus giving the incentive and means to finance research and development activities.

A functioning intellectual property regime should also facilitate the transfer of technology in the form of foreign direct investment, joint ventures and licensing.

The protection is usually given for a finite term (typically 20 years in the case of patents).

While the basic social objectives of intellectual property protection are as outlined above, it should also be noted that the exclusive rights given are generally subject to a number of limitations and exceptions, aimed at fine-tuning the balance that has to be found between the legitimate interests of right holders and of users.

VI. Challenges for Vietnam with Intellectual property in EVFTA:

1. Current IP protection state in Vietnam:

1.1. Viet Nam’s current IP system:

1.1.1 International Treaties relating to IP protection for Viet Nam:

Generally, Viet Nam has been a member of several treaties which are the cores of the international IP system such as:

- The Paris Convention for the Protection of Industrial Property,

- The Berne Convention for the Protection of Literary and Artistic Works,

- The Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations,

- The International Convention for the Protection of New Varieties of Plants

- The Stockholm Convention for Establishing the World Intellectual Property Organization. Viet Nam has also joined a number of treaties on facilitation of the international registration of IPRs like the Patent Cooperation Treaty and the Madrid Agreement and the Protocol for the International Registration of Marks

1.1.2. Vietnam’s legal document system of IP protection:

Firstly, IP protection in Vietnam is regulated by the Law on Intellectual Property Rights in 2005, which was amended and supplemented in 2009. Vietnam’s intellectual property (IP) legislation is comprehensive, covering every aspect of the protection of IP in accordance with international standards. Administrative action is the common route for dealing with infringements, offering low-cost, quick results. However, this method is limited because of the low level of penalties and lack of compensation.

Secondly, despite the endeavor of the government, counterfeit and pirated goods in Vietnam are still at an alarming level 16 . As counterfeiters are becoming more sophisticated in their methods and practices, counterfeit market is still a big problem in Vietnam.

From economic perspective, IP infringements destroy the comparative advantage of products and Vietnam’s ability to attract foreign investment. These days, foreign investors compete on innovation, invention and high-quality design and production, and the problem and scale of counterfeiting in Vietnam can make the market less attractive to the foreign investors. For companies working in IP- sensitive sectors, the high level of piracy and theft in Vietnam makes companies reluctant to do research or bring in their advanced designs.

1.1.3. IP regulating bodies in Vietnam:

IP system is constituted of three specialized sectors managed by three authorities:

- The Ministry of Science and Technology, with the National Office of Intellectual Property of Vietnam (IP Vietnam) acting as the focal point, takes charge of industrial property as well as general IP-related issues.

- The Ministry of Culture, Sports and Tourism, via the Copyright Office of Vietnam (COV), performs the state management of copyright and related rights.

- The Ministry of Agriculture and Rural Development, with a focal point being the Plant Variety Protection Office under the Department of Crop

Production, is responsible for protection of plant variety rights.

At the local level, provincial-level People’s Committees perform the state management of IP through specialized agencies being departments of science and technology; culture, sports and tourism; and agriculture and rural development .

1.2. Achievements and limitations of IP protection system in Vietnam

1.2.1. Achievements:

According to the IP Annual Report 2019 of the National office of Intellectual property of Vietnam, 2019 has been a breakthrough year for the succeseful implementation of the socio-economic development plan in 2016-2020. The Intellectual property office of Vietnam achieved various meaningful results:

- The office recorded impressive results in the establishment of industrial property rights in 2019: it received 75,742 IPR applications in total (an increase of 26.7% compared to 2018), handled 65,029 applications (up 51.7% compared to 2018) and granted 40,715 IPR protection titles (up 40.6% compared to 2018). This showed huge efforts of the leaders and employees of IP office of Vietnam in meeting the needs of intellectual property protection of businesses and inventors, ensuring a facilitated and transparent business and investment environment for Viet Nam.

- The Law amending and supplementing a number of articles of the Law on Insurance Business and the Law on Intellectual Property was adopted by the National Assembly to help implement the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). In 2019, IP Viet Nam also initiated the process of amending the Intellectual Property Law to internalise its commitments in the CPTPP and EVFTA free trade agreements.

- Training, dissemination and dissemination activities were implemented effectively for various stakeholders; the industrial property information was maintained, basically meeting the needs of society in scientific research, technological development and innovation. The National IP Assets Development Programme was implemented properly, making it the model for the development and implementation of IP assets development programmes of industries and localities across the country.

1.2.2. Limitations:

- As the IP system is composed of three bodies managing three different fields of IPRs, the management of IP activities is somehow uncentralized, incoherent and unsystematic. It is not to mention the lack of mechanisms for inter-agency coordination. Until now, the system of legal documents on IP has remained cumbersome and complicated with guiding documents issued by authorities of different levels. As a result, some provisions are inconsistent and unclear, while others are infeasible or unsuitable to realities, making them difficult to implement.

- Formalities for establishment and enforcement of rights constitute another problem. The processing of applications for establishment of industrial property rights is often prolonged beyond the law-prescribed time limit and not yet conducted in a public and transparent manner, thus restricting access to information by applicants and the public. Regarding protection of IPRs, although many agencies are competent to sanction administrative violations, none of them is assigned to act as the main focal point. As each of these agencies is responsible for a specialized field or a specific stage of the production-consumption cycle, the update and exchange of information among them can hardly be promptly implemented, while there remain overlaps in their tasks and responsibilities. The court system still lacks qualified and experienced human resources, thus failing to timely and effectively handle complicated IP cases and matters. Meanwhile, the mechanism for settlement of disputes through mediation and arbitration has not yet been fully brought into play.

- Difficulties in IP activities may also stem from limitations in public awareness about protection of IPRs. People, organizations and enterprises still fail to take the initiative in protecting their own rights and to respect the rights of others. When their rights are infringed upon, rights holders and industrial property representatives often hesitate to initiate lawsuits at court but prefer to seek administrative measures to settle their cases.

- IPRs are, by nature, civil rights, and the employment of civil measures in protection of IPRs remains limited. According to statistics of the Supreme People’s Court, from July 2006 through September 2016, the court system had adjudicated just 174 civil cases involving IP-related disputes and settled 200 IP-related business and trade disputes. Moreover, with the advantages of requiring less time, simpler procedures and lower costs, administrative measures are still the key tool in protection of IPRs. During 2012-15, inspectors of the culture, sports and tourism sector had administratively handled 386 cases of infringement upon copyright and related rights, imposing a total fine of over VND 9 billion. Science and technology inspectorates had handled 473 cases of industrial property violations, levying a fine amount of roughly VND 6 million. The market surveillance force under the Ministry of Industry and Trade had inspected and dealt with around 22,500 cases involving counterfeit goods and IPRs-infringing goods, collecting nearly VND 53 billion of fine to the state coffers.

* Has the EVIPA entered into force?

The EU-Vietnam Investment Protection Agreement (EVIPA) was ratified by Vietnam on 8 June 2020, together with EVFTA.

Now, for EVIPA to enter into force, it needs to be ratified by all 27 Member States of the European Union.