Transitioning towards productivity-driven growth

To capture the surge in e-commerce activity and harness the digital trade opportunities in the country, the report by the Hinrich Foundation recommends that Vietnam needs to ensure open data flows and interoperability since the country has extensive data policies that creates barrier to cross-border data flows.

Similarly, it should rethink about the content restrictions and promote innovation-oriented approaches to copyright and intermediary liability regulations, and balance Internet Intermediary Liability (IIL) norms that would ensure an effective removal of illegal and undesirable content without restraining the free flow of information.

The new generation free trade agreements such as EVFTA and CPTPP would help boost Vietnam’s digital trade and enable Small and Medium Enterprises to venture into global trade. The CPTPP and EVFTA will boost the economy, CPTPP is estimated to boost Vietnam’s economy by 1.3% by 2035.

The treaties will aid Vietnamese businesses to diversify its export base. It will enable firms to achieve cost-efficiencies from data storage, allow Vietnamese companies to adopt efficient business practices and support management of global supply chains, thereby providing impetus towards a productivity-driven growth.

The agreements have advocated for free flow of information, duty-free flow of goods and services, prohibition of data localisation requirements and source code disclosure. However, there are certain policies of the government which would require re-evaluation before the full economic value of digital trade is realised.

The Cybersecurity Law of Vietnam, which took force in 2019, has strict provisions on data localisation. Relaxation of data localisation will help Vietnam reap the benefits arising from digital trade and trade agreements for which they have negotiated hard over several years and aid its economy towards a productivity-driven growth.

Learn more about the Hinrich Foundation's digital trade research project here.

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