What's the connection? Vietnam, the rule of law, human rights and antitrust.

• Author: Ben-Asher, Dror

1. INTRODUCTION

   Foreign attempts to support advancing the rule of law(1) in Vietnam have taken many forms. In addition to focusing almost exclusively on economic law, existing legal assistance projects tend to concentrate on obvious targets such as the National Assembly, the courts, and human rights in general.(2) This essay proposes taking a different direction through the involvement of the United States in a somewhat unique domain for foreign legal aid: the introduction of an antitrust regime.

   This article aims to create a specific model demonstrating the potential social benefits that adherence to the rule of law may deliver. It introduces a project design that with U.S. help will provide an antitrust system to Vietnam. The example proposed here requires, among other things, the drafting of country-specific antitrust legislation and the establishment of adequate enforcement mechanisms. The overall hope is that successful implementation of the outlined project will significantly promote the advancement of the rule of law and human rights in Vietnam. Possible improvements in U.S.-Vietnamese relations, as well as the enhancement of U.S. commercial interests in Vietnam, are also envisaged.

   Part II briefly outlines the relevant political and legal background. Part III, forming the bulk of this essay, discusses the rationale for a U.S.-backed antitrust project. Part IV considers in some detail the project's strategy and proposed implementation, and Part V describes a number of possible risks arising from it.

   The general approach taken here is that utilization of extensive U.S. experience in the antitrust field can produce noticeable gains that will be felt by the Vietnamese society as a whole. At the same time, an antitrust project is not overly ambitious and avoids antagonizing the Vietnamese leadership.

2. BACKGROUND

   1. General Background

      Vietnam(3) has two main historical features. The first feature is constant wars.(4) The second feature is strong political influence by various foreign powers, including China, France, the former Soviet Union, and the United States.(5) Indeed, the effects of Confucianism, Colonialism, Communism, and local traditions are manifested in the legal system of today's Socialist Republic of Vietnam.(6) In 1986, pursuing economic prosperity, Vietnam embarked on a course of economic reform called doi moi, meaning renovation.? Despite many obstacles, the policy of doi moi continues today largely because the Vietnamese Communist Party (VCP) appears to assume that its future is firmly pinned to continuing economic growth.(8)

   2. Political and Legal Reforms

      Vietnam's movement toward a market-oriented economy is accompanied by economic legislation considered necessary for that purpose.(9) While the VCP seems determined to adapt the legal system to the needs of the changing economy,(l0) Vietnam remains a one-party state under their leadership.(11)

      Stemming from this political and economic state of affairs are a number of contentious issues including the suitability of the separation of powers doctrine, the need to restructure the central state apparatus, and the protection of human rights.(12) More specifically, legal reforms raise serious concerns about the independence of the judiciary, the legislative struggle for power, the role of the executive within the legal system, and the fundamental problem of conflicting legal construction models.(13) In summary, the role of the VCP and the related issue of the rule of law are sources of continuing tension within Vietnam.

3. PROJECT RATIONALE

   1. Objectives

      The objective of the scheme outlined here is to actively support the evolution of the rule of law in Vietnam while remaining aware of the interests of U.S. businesses and others.

      1. Primary Objective: Establishing the "Rule of Law."

         Relying on the "Western" model as a yardstick for evaluation, the significant elements of the rule of law opposing governmental arbitrariness existed in traditional Vietnam.(14) Western standards of the rule of law consist of two broad components. The first component is substantive due process of law, which requires legal rules to be uniform, rational, fair, and clearly ascertainable. The second component is procedural due process of law, which requires an institutional arrangement composed of a system of hierarchical courts run by professionals, independent from the executive, with well-defined procedural rules.(15) The current talk in Vietnam of improving "state rule by law" should not be mistaken with the Western concept of the rule of law.(16) The former refers to technical improvements made by scrutinizing the overlap of laws issued over several decades, codifying them by subject area, and training legal specialists to carry them out.(17) In contrast, the latter provides the foundation for a high degree of respect for human rights.(18)

         In the Vietnamese sphere, "`state rule by law' reasserts the Confucian (and Marxist) principle that the good of society outweighs the good of the individual and all other self-interested entities, such as the family, the village, or the business enterprise."(19) Thus, the discussion of the state rule by law in Vietnam generally boils down to "defining the `good of society.'"(20) On this reading, the creation of greater transparency in the Vietnamese legal process is a major challenge because the good of society is a vague term that is vulnerable to manipulation. So far, legislation has failed in resolving this and other underlying issues.(21) Indeed, the Vietnamese conception may be contrasted with the U.S. legal theory where individual rights are perceived as roughly equal to the rights of the state, and where the good of society is believed to be best served by safeguarding individual rights.(22)

      2. Secondary Objective: U.S. Investors' Concerns

         The principal concerns of U.S. investors in Vietnam are red tape, corruption, domestic protectionism, and lackluster law enforcement, all of which tend to impede business.(23) In a speech given to the National Assembly, former Prime Minister Kiet stated that the Vietnamese "legal system fails to create an environment of security, transparency [and] a sense of long-term security among investors and businessmen."(24)

   2. Special Considerations in Formulating the Project

      A number of factors must be considered in formulating the proposed project. The first consideration is the special nature of U.S.-Vietnamese relations. To be sure, the recent conflict between the two countries remains a potent factor and calls for extra care in any action taken by the United States.(25) Overall, the scheme proposed here will expedite the development of stronger U.S.-Vietnamese relations. Second, any proposed plan must respond to Vietnam's genuine needs. In other words, it should address real shortages rather than mistaken or invented ones. Third, logic dictates that the project should embrace a legal field in which the United States can offer experience and models. Fourth, any field-specific U.S. effort must eventually serve, in one way or another, the broader objective of improving human rights conditions in Vietnam. Fifth, since any U.S. venture in Vietnam is closely watched at home and abroad, the program must be capable of clear explanation. Finally, since a number of existing foreign donors already operate to varying degrees in Vietnam,(26) any program seeking to have meaningful impact should avoid unnecessary duplication of effort and avoid the past mistakes of other foreign donors.

   3. Project Justification

      The natural tendency in approaching a rule of law project is to focus on goals such as strengthening the judiciary, the legislature, the relevant executive agencies, and the system of legal education. These important projects are founded on the expectation of an overall movement of the legal system toward the rule of law in its Western version. All the same, in view of the objectives and special considerations mentioned above, this project takes a different approach by focusing on one area of law: antitrust.

      1. Antitrust

         Antitrust law is concerned with control of economic power.(27) It is based on the idea that competition is the appropriate means to control the abuse of economic power.(28) In the United States, the main objective of antitrust law is to promote the optimal use of resources.(29) This efficiency-oriented approach is undertaken to effectively cater to consumer preference and consumer welfare.(30) To put it more simply, it is believed that competition enables consumer preference to determine the proper quantity of goods to be produced, which optimizes the use of available resources.(31) Socially-oriented values of competition are also encompassed within the philosophies of U.S. antitrust law and include the deconcentration of economic power, more equitable income distribution, protection of market access, opportunity to compete on the basis of merits and choice, control of unchecked economic power through maintenance of the competitive market, promotion of consumer choice, and promotion of fairness in economic behavior.(32)

         To achieve these ends, U.S. antitrust laws generally prohibit practices that restrict competition. Unlawful practices include monopolization, cartels, anticompetitive mergers, price discrimination, and other unfair practices.(33)

         Unlike China, where efforts are currently under way to introduce an effective antitrust regime,(34) Vietnam refuses to open the door to competition in many areas.(35) There is little doubt that this policy results in inefficiency and artificially high prices that harm the Vietnamese economy. For example, sky-high long distance charges and extremely low quality Internet service are largely attributed to the lack of effective competition.(36) Vietnam's resistance to competition in aviation brings about similar results.(37) Clearly, the lack of competition adversely affects the Vietnamese government's stated goals of having an...