The importance of legal aspects in international trade and solutions for Vietnamese enterprises

DNHN - Vietnamese enterprises will achieve significant progress in international business activities and contribute positively to the sustainable development if they are cautious and pay more attention to legal factors.

Amid the complex fluctuations in the international market, Dr. Vu Tien Loc, Chairman of the Vietnam International Arbitration Center (VIAC), National Assembly Delegate, and Member of the National Assembly's Economic Committee, has made important recommendations for businesses engaged in international trade. He emphasized the importance of legal factors, especially in the context of a market facing numerous unpredictable fluctuations.

According to the United Nations' report on "World Economic Situation and Prospects 2024", the global economy is expected to see a mild recovery with an estimated growth rate of 2.7% this year and 2.8% next year. However, the report also warns of potential factors that could undermine economic prospects, such as high policy interest rates in major economies, geopolitical tensions, and increasing climate risks.

Vietnam, despite being rated as one of the economies recovering well after the pandemic, still faces direct and indirect impacts from these factors. The transition to a digital economy brings new opportunities and challenges, requiring businesses to be more meticulously prepared in legal aspects.

"In international trade, Vietnamese enterprises often focus on revenue, pricing, sales, and profit, while paying little attention to legal issues and partners, which can lead to disputes and risks. According to the World Bank's rankings on competitiveness, the index of contract enforcement and dispute resolution is one of the important indices. Although Vietnam has made significant progress in improving this index in recent years, its overall ranking compared to the world is still relatively low. Therefore, improving the contract enforcement and dispute resolution index is a crucial requirement, necessitating significant efforts from all stakeholders", emphasized Dr. Vu Tien Loc on the importance of careful consideration and thorough preparation regarding legal matters in international business activities. Disputes and risks can arise from neglecting legal issues and partners in international business.

To minimize these risks, he advises businesses to enhance their capacity to participate in dispute resolution through arbitration and mediation. While over 90% of cross-border trade and investment disputes are resolved through these methods globally, VIAC has actively contributed to improving the capacity and efficiency of commercial arbitration activities in Vietnam.

In Vietnam, despite limited resources, the Vietnam International Arbitration Center (VIAC) has consistently contributed over the past 30 years to preventing legal risks, managing, and resolving contractual disputes in business activities, especially for commercial and investment transactions with international elements. This has facilitated Vietnamese enterprises in "taking the bell to ring in foreign lands." Promoting commercial arbitration activities not only helps improve the business investment environment and encourages outbound investment but also aims for a broader goal of making Vietnam a preferred choice for resolving commercial arbitration disputes.

Regarding technology, Dr. Vu Tien Loc believes that applying technology to dispute resolution will optimize processes, save time, and reduce costs for involved parties. Online dispute resolution systems and electronic platforms will play a crucial role in enhancing transparency and fairness in handling disputes.

However, he also emphasizes that to succeed in applying technology to dispute resolution, it is necessary to ensure factors related to contract execution and enforcement mechanisms.

"From a micro perspective, electronic contracts, like traditional contracts, require factors that ensure their conclusion, implementation, and effective enforcement mechanisms if issues arise during execution. Therefore, the recent use of online dispute resolution methods will be a suitable enforcement mechanism for electronic contracts, contributing to the country's goal of moving towards a digital economy", Dr. Vu Tien Loc stressed.

An Nguyen