Trade and the transition towards circular economy

MINISTRYOFEDUCATIONANDTRAINING FOREIGNTRADEUNIVERSITY MASTERTHESIS TRADE AND THE TRANSITION TOWARDSCIRCULARECONOMY: A RESEARCH ON CURRENT GLOBAL PRACTICESANDRECOMMENDATIONSFOR VIETNAM Specialization:InternationalTrade PolicyandLaw NGUYENTHI HANG Hanoi– 2020 MASTERTHESIS TRADE AND THE TRANSITION TOWARDSCIRCULARECONOMY: A RESEARCH ON CURRENT GLOBAL PRACTICESANDRECOMMENDATIONSFOR VIETNAM Specialization:InternationalTradePolicyandLaw Code:8310106 Student: Nguyen Thi HangSupervisor:Dr.VuKimN gan Hanoi– 2020 STATEMENTOFORIGINALAUTHORSHIP I, Nguyen Thi Hang, hereby declare that this Master's Thesis has been writtensolely by the undersigned under the guidance of my supervisor, Dr Vu Kim Ngan,Foreign Trade University, Hanoi, Vietnam The contents and results of this researcharecompletelyhonest.Theinformation,dataanddocumentswhicharecollectedfrom various sources for analysis and evaluation have been fully cited in the maincontentandin thereferences list ofthismasterthesisaswell I also state that said Master's Thesis has not been submitted elsewhere for thefulfilment ofany otherqualification I make this statement in full knowledge of and understanding that, should it befoundtobefalse,I will notreceivea gradeandmayfacedisciplinaryproceedings Student NguyenThiHang ACKOWLEDGEMENT Ino r d e r t o c o m p l e t e t h i s m a s t e r t h e s i s , I h a v e b e e n r e c e i v e d e n t h u s i a s t i c guidance and support from my lectures, family, my friends and experts in the field.Fromthebottomofmyheart,Iwouldliketoexpressmythankstothem Firstly, I would like to express the sincerest thanks to my supervisor, Dr VuKim Ngan who has supported, guided and encouraged me during the completion ofthis master thesis from choosing the topic, outlining the main ideas, turning thoseideas into this thesis to editing this paper Without her enthusiastic and excellentguidanceandsupport,Icouldnothavecompletedthismasterthesis Also, I would like to express my special thanks to all lecturers of the Master ofInternational Policy and Law program, Foreign Trade University as well as WorldTradeInstitutewhogavemethechancetobroadenmyhumblehorizoninthefieldoftrade policy andlaw,especiallyProfessorClaudioDordi,whowasalsomyformersupervisor at the European Trade Policy and Investment Support Project (EU – MUTRAP),forthevaluableknowledgeandexperiencesthathe’ssharedwithme Last but not least, I would like to express my warm thanks to my preciousfamily, my colleagues and my dear friends who never stop supporting, encouragingandgivingme thefavorable conditionsformymasterjourney Especially,IwouldliketodedicatethisMasterthesistomybelovedGrandfather, who was once a brave soldier on the Dien Bien Phu battlefield, whoraisedmeandwasmyrolemodelofhardworkingspirit,positiveattitudeandmorality.Imi ghtnotbecomewhoIamtodaywithouthim.Iamtypingtheselinesintearsofgriefrightafterhisfu neral.IregretthatIcouldnotmanagetolethimseehisgrandchildgraduatebeforeheleftfortheotherside.Nowmy grandfatherhaslonggone,ItrulyhopeheisstilltherebesidemeandknowsthatImisshimsomuch Iloveyou, Grandpa! TABLEOFCONTENTS STATEMENTOFORIGINALAUTHORSHIP .i ACKOWLEDGEMENT .ii LISTOF ABBREVIATIONS v LISTOF FIGURES ANDTABLES .vii ABSTRACT viii INTRODUCTION CHAPTER1:OVERVIEWANDTHESIGNIFICANCEOFCIRCULARECONOM Y 1.1 Theneedtopromotecirculareconomy 1.1.1 Lineare c o n o m y : t h e i s s u e o f r e s o u r c e s e f f i c i e n c y & e n v i r o n m e n t a l pollution 1.1.2 ThepromotionofCircular Economy 13 1.2 Theimpactof circulareconomyontradeflows 19 CHAPTER 2: OVERVIEWOFGLOBALCIRCULARECONOMYPRACTICESANDTRADE 25 2.1 Overviewofglobalcirculareconomypractices 25 2.1.1 WTOrules,domestictradepolicies andcirculareconomy 25 2.1.2 Restrictivetrademeasures andcircular economy 28 2.1.3 Circulareconomyinitiativesin some countries 30 2.2 Circulare c o no my p r a c t i c e s inC h in a 33 2.3 CirculareconomypracticesintheEU 37 2.3.1 Circulareconomypolicy 38 2.3.2 TheEU’stradepolicies in relationtocirculareconomy 40 2.3.3 The EU’simplementationofCEActionPlan 46 2.4 Implications for VietnamasatradepartneroftheEU 47 2.4.1 The EU–VietnamTrade Relation 47 2.4.2 TheE U ’ s t r a n s i t i o n t o w a r d s c i r c u l a r e c o n o m y a n d i m p l i c a t i o n s f o r Vietnam 48 CHAPTER3:TRADEANDCIRCULARECONOMYINVIETNAM:LAWS,REGULA TIONSANDPRACTICES 51 3.1 Legal frameworkforthecirculareconomy 51 3.1.1 Internationalcommitmentsrelatedtocirculareconomy 51 3.1.2 Domesticl e g a l f r a m e w o r k a s a p l a t f o r m f o r c i r c u l a r e c o n o m y development 53 3.2 Circulareconomy-basedpracticesinVietnam 55 3.3 Vietnaminthesupplychainoftheglobalcirculareconomy 59 3.3.1 Globalrecycling industry 59 3.3.2 Vietnam’stradeinthetransitiontowardscirculareconomy 63 CHAPTER 4: RECOMMENDATIONST O D E V E L O P C I R C U L A R ECONOMYINVIETNAM 73 4.1 Futureprospectandtheneedtodevelopcirculareconomyin Vietnam73 4.2 Evaluationofthefeasibility todevelop circulareconomyinVietnam 74 4.2.1 Advantages ofVietnamin developingcirculareconomy 74 4.2.2 ChallengesforVietnam’s transitiontowardscirculareconomy 75 4.3 RecommendationsforVietnamtodevelopcirculareconomy 78 4.3.1 Developmentof alegalframeworkforcirculareconomy 78 4.3.2 Initiativesforenterprises .80 4.3.3 Internationalcooperation forcirculareconomy 81 CONCLUSION 87 LISTOF REFERENCES .88 ANNEX1 : L I S T O F S C R A P S A L L O W E D T O B E I M P O R T E D F O R PR ODUCTIONMATERIALS i ANNEX 2: LIST OF WASTES SUBJECT TO TEMPORARY SUSPENSIONFROMTEMPORARYIMPORT,REEXPORTORMERCHANTINGBUSINESS .iv ANNEX3:SUMMARYOFKEYLEGISLATIONANDPOLICIESRELATEDTO CIRCULARECONOMYINVIETNAM .vii ANNEX 4: ALL 54 ACTIONS PLANS INCLUDED IN THE EU CIRCULARECONOMYACTIONPLAN(2015) ix LISTOFABBREVIATIONS Abbreviation Fullversion AEC ASEANEconomic Community AfDB AfricanDevelopment Bank ASEAN AssociationofSoutheastAsianNations CE Circulareconomy CIEM CentralInstituteofEconomicManagement COP ConferenceoftheParties CPTPP ComprehensiveandProgressiveAgreementforTrans-Pacific Partnership CTE CommitteeonTradeandEnvironment EBRD EuropeanBankfor ReconstructionandDevelopment EEU EurasianEconomic Union EGS EnvironmentGoodsandServices EIB EuropeanInvestmentBank EPR ExtendedProducerResponsibility EU EuropeanUnion EVFTA EU-VietnamFreeTradeAgreement FTA FreeTradeAgreement G7 Groupof Seven GATT GeneralAgreementonTariffsandTrade GDP GrossDomesticProduct GFN GlobalFootprintNetwork HS HarmonizedSystem IEEP Institutefor European EnvironmentalPolicy MFN MostFavoredNation NDCs NationallyDeterminedContributions NT NationalTreatment OECD TheOrganizationforEconomicCooperationandDevelopment RCEP TheRegionalComprehensiveEconomicPartnership SCMAgreement TheAgreementon Subsidiesand CountervailingMeasures SDGs SustainableDevelopmentGoals SIA SustainabilityImpactAssessment SMEs Small-andMedium-sizedEnterprises SPSAgreement TheAgreementonSanitaryandPhytosanitaryMeasures TBTAgreement TheAgreementonTechnicalBarrierstoTrade TTIP TransatlanticTradeandInvestmentPartnership UK TheUnited Kingdom UN UnitedNations UNCTAD TheUnited NationsConferenceon TradeandDevelopment UNIDO TheUnited NationsIndustrialDevelopment Organization VBCSD VietnamBusinessCouncilforSustainableDevelopment VCCE VietnamCentrefor CircularEconomy VCCI VietnamChamber ofCommerceandIndustry VRP VietnamRecyclingPlatform WCO WorldCustomsOrganization WSR WasteShipmentRegulation WTO WorldTradeOrganization LISTOF FIGURES ANDTABLES FIGURES Figure1.1: Lineareconomymodel 10 Figure1.2: Principleofcirculareconomy: Makingthingslast .11 Figure1.3: CircularEconomytotackletheoverlookedemissions 12 Figure1 : T h e c i r c u l a r e c o n o m y – a n i n d u s t r i a l s y s t e m t h a t i s r e s t o r a t i v e b y design .15 Figure1.5: Opportunitiesfortradeinwasteandsecondarymaterials 24 Figure2.1.Theevolutionofcirculareconomy policyin China 35 Figure2.2 Circular EconomydevelopmentinChina 37 Figure3.1: Global wastetradedinternationally,byvalueandweight 59 Figure3.2:MajorexportersofplasticswastetoChinain 2016 60 Figure3.3:Importsofplastic scrapscomingtoVietnam(intons)showingthet op10exportpartners 65 TABLES Table1.1:Impactofcirculareconomyontradeflows 20 Table2.1: Resource Efficiency& CircularEconomyNationalPolicy/Strategy 32 Table2 C i r c u l a r E c o n o m y P a c k a g e : P r o p o s e d a m e n d m e n t s t o f o u r w a s t e managementlegalactsoftheEU 38 Table2.3: TheEU’sCircularEconomyActionsandtheirtradeimplications 49 Table3.1 Non-profitalliances/initiatives with theconceptofcirculareconomy 57 Table3.2:ListofVietnam’sregulatorydocumentsfortradeinwasteandscrapsasr ecyclablematerialsforproduction 67 Table3.3: Usedgoods, wasteand scrapbannedfromimportto Vietnam 69 Table3.4: Listofscraptemporarilysuspended fromimportintoVietnam 70