According to Article 8.1 of the EU-Vietnam Free Trade Agreement (EVFTA), the EU and Vietnam, affirming their respective commitments under the WTO Agreement and their commitment to create a better climate for the development of trade and investment between the Parties, lay down the necessary arrangements for the progressive liberalisation of investment and trade in services and for cooperation on electronic commerce.
The liberalization of services trade applies to a wide range of sectors, including e.g. computer, finance, communication, environment or transport. The facilitated market access for service suppliers has benefitted cross-border supply of services between the EU and Vietnam.
According to Article 8.9 of the EVFTA, the only exceptions to liberalisation are
- audio-visual services;
- national maritime cabotage; and
- domestic and international air transport services, whether scheduled or non-scheduled, an services directly related to the exercise of traffic rights, other than:
- aircraft repair and maintenance services during which an aircraft is withdrawn from service;
- the selling and marketing of air transport services;
- computer reservation system (CRS) services; and
- ground handling services.
Definitions
Article 8.2 EVFTA stipulates a number of definitions that are relevant for joint services trade between the EU and Vietnam. This include:
- Cross-Border Supply of Services
According to Article 8.2 para. 1 (c) of the EVFTA, “cross-border supply of services” means the supply of a service:
(i) from the territory of a Party into the territory of the other Party; or
(ii) in the territory of a Party to the service consumer of the other Party;
- Services
According to Article 8.2 para. 1 (o) of the EVFTA, “services” means any service in any sector except services supplied in the exercise of governmental authority.
- Service supplier
According to Article 8.2 para. 1 (q) of the EVFTA, “service supplier” of a Party means any natural or juridical person of a Party that supplies a service.
Market Access
The obligations relating to access to the services market for service providers of both parties are only minimum obligations. As stated in Article 8.4 para. 1 of the EVFTA, with respect to market access through establishment and maintenance of an enterprise, each Party shall accord treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its respective Schedule of Specific Commitments in Annex 8-A (The Union’s Schedule of Specific Commitments) or 8-B (Viet Nam’s Schedule of Specific Commitments).
However, the parties are free to take measures that go beyond the minimum obligations and allow broader market access. In order to guarantee the minimum obligations, the parties are obliged under Article 8.10 para. 2 of the EVFTA to reduce or remove restrictions in the following areas:
- limitations on the number of service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirement of an economic needs test;
- limitations on the total value of service transactions or assets in the form of numerical quotas or the requirement of an economic needs test; and
- limitations on the total number of service operations or on the total quantity of service output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test.
National Treatment
The EU and Vietnam have also agreed to ensure that the same rules and regulations apply to domestic and foreign services providers in certain sectors in order to create a predictable business environment and a level playing field.
Therefore, pursuant to Article 8.11 para. 1 of the EVFTA, in the sectors inscribed in its respective Schedule of Specific Commitments in Annex 8-A (The Union’s Schedule of Specific Commitments) or 8-B (Viet Nam’s Schedule of Specific Commitments) and subject to any conditions and qualifications set out therein, each Party shall accord to services and service suppliers of the other Party, in respect of all measures affecting the cross-border supply of services, treatment no less favourable than that it accords to its own like services and service suppliers.
Temporary Presence of Natural Persons for Business Purposes
Under the EVFTA, Vietnam has simplified entry for business visitors, intra-corporate-transferees, business sellers, contractual service suppliers and independent professionals and allows a temporary stay between 90 days and 3 years.
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Please do not hesitate to contact Dr. Oliver Massmann at [email protected] if you have any questions. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
