Official letter No. 2538/BCT-DB notes the Ratchet principle in the CPTPP's service and investment commitments

13/07/2022    20

Issue date: 11/05/2022

Issued by: Ministry of Industry and Trade

The Ministry of Industry and Trade issued Official Letter No. 2538/BCT-DB dated 11/5/2022 to ministries, branches and People's Committees of provinces and cities about paying attention to Ratchet principle in service and investment commitments of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has come into force for Vietnam.

The official letter clearly states that within the framework of the CPTPP Agreement, the Ratchet principle, also known as the principle of no backwardness, is an important principle applied to market opening in the service-investment sector.

The CPTPP Agreement officially took effect with Vietnam on January 14, 2019, and from January 14, 2022, Ratchet Principles will be officially applied to Vietnam in the field of services and investment.

This requires ministries, branches and localities to pay attention in the issuance, amendment or enforcement of legal documents, policies or licensing for investment activities, service provision, especially is with the content related to the countries participating in the CPTPP to ensure it is consistent with the management and development orientation of Vietnam's service and investment sectors, avoiding disputes with service providers or foreign investors.

The Official Letter (in Vietnamese) is attached below.