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According to the WTO, concerns for environmental protection generally have been integrated in the free trade process to ensure the protection of the environment and the sustainable use of limited natural resources (WTO, 2010). Various aspects of environmental issues have been incorporated into international trade agreements since 1970s (Jayadevappa & Chhatre, 2000). Until the early 1990s, the General Agreement on Tariffs and Trade (GATT) and the WTO are the major forums where the impact of trade on the environment is properly and officially addressed (Carrapatoso, 2008).

Significant progress on discussion of this link was achieved by the commencement of the Doha Round in 2001. One of the aims of environmental supporters in the Doha Round was to strike a balance between environmental protection from Multinational Environmental Agreements (MEA) and economic decisions from Free Trade Agreements. In addition, the establishment of the

Committee of Trade and Environment (CTE) in the WTO and the Committee of Trade and Investment (CTI) in the Asia-Pacific Economic Cooperation Forum also marked the endeavors of the international community to protect the environment when establishing free trade relationships (Carrapatoso, 2008).

Previously, protection of the environment has been discussed in the preambles or side agreements of free trade agreements. Additional concern has been given to the protection of the environment, so it has been negotiated as an article in some drafts of FTAs (George & Serret, 2011). Anuradha (2011) claimed that the incorporation of environmental concerns tends to be addressed separately as a side agreement by developing countries. The main differences in environmental provisions which are integrated into FTAs are their enforcement mechanisms (Baghdadi et al., 2013).

Carrapatoso (2008) argued that the incorporation of environmental concerns into a free trade agreement negotiation is additionally based on the relationships between the trading countries, such as which countries will do the negotiating, their preferences and political points of views, economic development conditions and cultures of the countries. This is exemplified in the case where a

developing country is a partner in negotiating a FTA and negotiators from developed countries tend to avoid citing their domestic requirements and concerns to protect the environment. Instead, they use specific skills such as political arguments to convince their counterparts on issues related to the integration of environmental protection into the free trade agreements (Carrapatoso, 2008).

The benefit of incorporating environmental commitments into free trade policy is still ambiguous and there are limited studies on Vietnam. Baghdadi et al.’s study (2013) examines whether free trade agreements which incorporated environmental provisions helped to reduce CO2 emissions by

estimating the CO2 concentration emissions for 182 countries from 1980 to 2008. For those countries

which signed trade agreements that integrated environmental protection, the CO2 concentrations

are lower than for the countries which signed trade agreements without concern for the environment. Further, Baghdadi et al.’s study found that only the FTAs which incorporated environmental concerns positively affected the environment. In a case study which reviewed the impact of trade policy on China’s environment, Mao, Song, Kørnøv, & Corsetti (2015) found that an environmental impact assessment (EIA) on free trade policies ultimately improved both the

environmental and economic benefits for China overall.

(i) Integration of Environmental Concerns into FTAs in Vietnam

In 1995, Vietnam signed a framework agreement with the European Union which became an important dialogue framework. This agreement provides a cooperative mechanism for trading and commercial activities between Vietnam and EU countries, and also incorporates environmental protection (Thanh & Duong, 2011). The concern for the environment at this stage is at the cooperative level, which stipulates that both parties agree to cooperate in protecting the

environment. The detail on how to protect the environment via trade activities, however, has not been explored.

In 2012, Vietnam and the EU signed a framework agreement on a comprehensive partnership and cooperation that included not only the environment and natural resources protection but also cooperation on climate change. In terms of the environment and natural resources, the agreement aims at strengthening cooperation via technical assistance programmes, and transfer and utilisation of environment-friendly technologies. The cooperation on climate change aims at improving the energy performances of the economies more efficiently toward a green energy innovation. In order to achieve these objectives, the agreement sets out the cooperation framework focusing on technical cooperation and enhancing capacity building to address challenges in climate change.

Based on the framework agreement of 2012, Vietnam and the EU started to negotiate the EVFTA in 2013, which was completed in November 2015 with separate provisions on environmental protection

integrated into it. Besides, Vietnam negotiated a separate free trade agreement with the EU Free Trade Area (the EFTA) (MOIT, 2016).

Vietnam and Japan signed an economic partnership agreement (VJEP) in 2008 which includes several provisions on environmental protection cooperation in the agreement. The VJEP aims at liberalising and facilitating trade in goods and services between both countries (MOIT, 2016). The environmental protection provisions in this agreement mainly focus on technical co-operation and capacity building.

The Vietnam - US Bilateral Agreement (BTA), which was signed in 2000, can be considered as the most comprehensive trade agreement in Vietnam since 2000 (Parker, Phan, & Nguyen, 2002). This trade agreement granted a framework that is designed to enhance trade between the two countries. The agreement includes provisions on market access, national treatment and tariff reduction. The agreement also specifies the elimination schedule for quantitative restrictions on several products in the industry and agriculture sectors.

Further, Vietnam is also required to commit broadly on opening up a range of service sectors for trade (Fukase, 2013) as a result of the BTA. Specifically, the BTA required a tariff reduction package from Vietnam on the most-favoured-nation (MFN) basis for 250 products which are mainly

agricultural products. Besides, the business environment required improvement to enable the US companies to operate in Vietnam. However, there is no requirement on environmental protection in the 121 pages of the agreement5_{. This reflects that the environmental concerns have not been}

discussed and integrated into the trade activity in Vietnam during that period.

Vietnam showed a strong shift in incorporating environmental protection commitments into free trade policy during the negotiation of the CPTPP. In 2009, Vietnam officially negotiated the Trans- Pacific Partnership agreement with eleven other countries, namely Australia, New Zealand, Brunei, Malaysia, Singapore, Chile, Peru, Canada, Mexico, the United States and Japan. The CPTPP aims at establishing an extensive regional free trade agreement to promote international economic

integration and liberalisation in trade and investment activities (CPTPP, 2017). The CPTPP is expected to further enhance regional economic integration among member countries as well as to create a foundation for FTA in the Asia Pacific region.

On October 4, 2015 the CPTPP announced the conclusion of the negotiations by the Ministers of the twelve CPTPP countries. In January 2017 the new administration of the US announced its withdrawal from the CPTPP; however, the eleven remaining members continued to negotiate the regional economic agreement without the US. This study uses the latest version of the CPTPP released in

October 2015 and published on the Vietnam government’s website to assess the impact of the free trade agreement on the environment in Vietnam. The eleven remaining members of the CPTPP (without the US) are collectively named the CPTPP member countries in this study.

The CPTPP covers basic conditions on trade promotion as well as obligations on labour, the environment, sanitary and phytosanitary measures, etc. In terms of environmental protection, particularly, the CPTPP encourages high levels of environmental protection through effective enforcement of environmental laws, and sustainable development through mutually supportive trade and environmental policies and practices. Details on environmental requirements incorporated into the CPTPP are described below.

(ii) Integration of Environmental Regulations into the CPTPP in Vietnam

Collectively, there are four main issues in the CPTPP that potentially generate a greater likelihood of CO2 emissions in Vietnam6, namely: national treatment and access for goods; rule of origin and origin

procedures (ROO); environmental regulations and cooperation activities; and dispute settlement mechanisms.

National Treatment and Access to Goods

The CPTPP sets up tariff elimination and reduction on goods (industrial and agricultural goods) across CPTPP member countries, and facilitates international trade procedures (CPTPP, 2017, chapter 2). Almost all proposed tax reforms on goods by the CPTPP will be effective immediately after the date the CPTPP goes into effect; and the rest are eligible for a retention period of tax reform if agreed by CPTPP member countries. The integration of re-structured goods in the CPTPP (CPTPP, 2017, chapter 2, p. 5, 11) may encourage the recycling, restructuring and reassembling of separated parts to form new products which are considered as environmental friendly goods. By the legalisation of re-

manufactured products, the CPTPP helps to reduce pressure on natural resources and waste disposal into the environment.

Rule of Origin and Origin Procedures

The CPTPP requires its member countries to prove the origin of goods to benefit from the tariff eliminations or reductions of the CPTPP. The CPTPP’s "accumulation rule” treats material from a CPTPP member country similarly to material from other CPTPP member countries if it is used to produce a product in a CPTPP country. This ensures that CPTPP member countries are the main beneficiaries of the CPTPP.

Strengthening the administration of ROO may help in reducing costs and delays to traders, increasing

transportation efficiencies and promoting a paperless working environment. Proving and providing the origin of goods also helps to avoid the situation of illegal exploitation of natural resources.

Environmental Regulations

The CPTPP creates enforceable commitments on a wide range of environmental issues such as commitments to the multilateral environmental agreements7 _{and national environmental laws. The}

CPTPP also proposes to eliminate environmentally destructive subsidies, tariffs and other barriers to trade in environmental goods and services and cooperate toward a low-carbon economy.

Besides, the CPTPP proposes a cooperative mechanism in transitioning to a low emissions and resilient economy. This may cover areas such as energy efficiency; development of cost-effective and low emissions technologies; emissions monitoring; low emissions and resilient development. These regulations may benefit Vietnam’s environment in terms of regulatory and technology effects.

Dispute Settlement Mechanism

Commitments on environmental protection will be enforced by the same dispute settlement procedures and mechanisms including trade sanctions for disputes arising from the CPTPP.

In summary, Vietnam has actively accelerated its participation into international economic

integration during the last 30 years. A variety of free trade agreements with developed countries has been concluded and/or has been being negotiated, such as the CPTPP, the EVFTA, the EVTA, the RCEP, etc. However, environmental protection has not been integrated into commitments in FTAs. The CPTPP is the first free trade agreement that Vietnam has negotiated which covers a broad range of environmental concerns. In particular, the dispute settlement procedures will be applied for any unresolved environmental issues arising under the trade agreement. These commitments will ensure that Vietnam considers environmental priorities, adopts or modifies relevant environmental laws and policies to protect the environment. The enforceable commitments and dispute settlement

mechanism enable Vietnam to protect the environment and consider any arising environmental issues more seriously during the implementation phase of the CPTPP.