Understand regulations to successfully export via e-commerce

Vietnam's economy is increasingly integrated into the world economy and participating in a series of FTAs. E-commerce also begins to appear in the content of new generation FTAs that Vietnam participates in, typically the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Can you tell us more about the content of e-commerce in this FTA?

E-commerce is a relatively new part in Vietnam's FTAs, mainly in new generation FTAs such as CPTPP, Vietnam-EU FTA (EVFTA), and Regional Comprehensive Economic Partnership (RCEP).

All three FTAs have similar frameworks, but the content, scope and comprehensiveness, as well as sanctions are very different.

With the CPTPP, e-commerce is a relatively comprehensive chapter. Among the three FTAs mentioned above, the CPTPP is the FTA with the most regulations and strictest rules related to e-commerce. Including general policies such as commitments not to impose import-export tax on electronic transmission products.

This is consistent with the general spirit of the WTO. However, many countries are also calculating beyond the general spirit of the WTO about this taxation issue.

The second is commitments that do not discriminate among similar digital products. This content with Vietnam is exempt for two years from the effective date of the CPTPP (January 14, 2019). So far, the exemption for Vietnam has expired.

However, the relevant part throughout the CPTPP and all FTAs with other e-commerce chapters is the requirement to protect consumers' interests. Laws on the protection of consumers in the network environment from fraud in e-commerce is a very important issue.

Enterprises do normal import-export according to traditional overseas channels, protecting the interests of consumers is a complicated issue, but this is even more complicated in e-commerce. Since there could be more sanctions, there are related requirements such as the role of e-commerce platforms.

It is also a challenge, but a more important one is culture. Electronic commerce violating regulations is quite a lot. If you do not adjust cultural habits with little respect to protect consumers, when participating in a "playground" with different institutions, businesses will face difficulties in exporting and immediately return to the country.

What is the content of e-commerce in the EVFTA and the RCEP?

EVFTA has softer regulations on e-commerce compared to CPTPP.

Specifically, customs duties are not imposed on electronic transactions; committing to cooperate through maintaining a dialogue on regulatory issues raised in e-commerce, including: responsibility of intermediary service providers in transmitting or storing information; dealing with forms of electronic communication in commerce without the permission of the recipient (such as email offers, advertising); and protecting consumers when participating in electronic transactions.

The RCEP also has similar contents and also new contents on e-commerce compared to the CPTPP and the EVFTA, including: trade facilitation; promulgate consumer protection regulations to prevent fraud in e-commerce; not apply customs duties to types of electronic transmission between parties; require to place computer equipment in the national territory as a condition to do business in the national territory of that party. However, it is not until after five years that the RCEP comes into effect the regulations on e-commerce are implemented.

Do you have any recommendations for Vietnamese enterprises to make good use of opportunities in FTAs and promote export of goods through e-commerce?

From the perspective of commitments, the most important thing is that businesses must find out information related to e-commerce in FTAs. In addition to the above-mentioned content, there are many other contents related to products traded on e-commerce such as: intellectual property protection, plant and animal quarantine or certification of conformity, as well as technical barriers.

The second is the participation and consultation with foreign partners and foreign regulatory agencies on e-commerce regulations or through Vietnamese authorities to exchange critical opinions or problems. The cost to foreign e-commerce regulators is also a very important factor. The Vietnamese authorities will have a practical basis for discussion with the partners.

Another important point that enterprises need to note is that commitments are only a minimum requirement, enterprises meeting commitments in the FTA does not mean that enterprises have fully met the standards of e-commerce in the partner market.

Thank you!