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TABLE OF CONTENTS
STАTEMENT OF ORIGINАL АUTHORSHIP.................................................... i
АCKNOWLEDGMENTS ..................................................................................... ii
TАBLE OF CONTENTS...................................................................................... iii
LIST OF АBBREVIАTIONS................................................................................ v
LIST OF TАBLES................................................................................................ vi
LIST OF FIGURES ............................................................................................. vii
АBSTRАCT.......................................................................................................... ix
INTRODUCTION ................................................................................................. 1
CHAPTER 1: OVERVIEW OF DIGITAL TRANSFORMATION ..................... 7
CHAPTER 2: SITUATION OF IMPLEMENTING WTO TFA IN VIET NAM
BEFORE “NATIONAL DIGITAL TRANSFORMATION PROGRAM” ......... 21
CHAPTER 3: SITUATION OF DIGITAL TRANSFORMATION ON TRADE
FACILITATION IN VIET NAM ......................................................................... 30
CHAPTER 4: GLOBAL TRENDING ON DIGITAL TRANSFORMATION IN
TRADE FACILITATION AND RECOMMENDATION TO VIET NAM ......... 52
CONCLUSION …................................................................................................ 67
REFRENCES ..…................................................................................................. 69
MINISTRY OF EDUCATION AND TRAINING
FOREIGN TRADE UNIVERSITY
MASTER THESIS
ASSESSMENT OF DIGITAL TRANSFORMATION ON
TRADE FACILITATION IN VIET NAM
Specialization: International Trade Policy and Law
FULL NAME: LÊ ĐỨC BÌNH
Hanoi – 2023
ii
TABLE OF CONTENTS
STАTEMENT OF ORIGINАL АUTHORSHIP.................................................... i
АCKNOWLEDGMENTS ..................................................................................... ii
TАBLE OF CONTENTS...................................................................................... iii
LIST OF АBBREVIАTIONS................................................................................ v
LIST OF TАBLES.......................................................................................
MINISTRY OF EDUCATION AND TRAINING
FOREIGN TRADE UNIVERSITY
MASTER THESIS
ASSESSMENT OF DIGITAL TRANSFORMATION ON
TRADE FACILITATION IN VIET NAM
Major: International Economics
Specialization: International Trade Policy and Law
Code: 8310106
FULL NAME: LÊ ĐỨC BÌNH
Supervisor: Assoc. Prof. Dr. TRINH Thi Thu Huong
Hanoi – 2023
ii
STATEMENT OF ORIGINAL AUTHORSHIP
I thus certify that this thesis is my original work, completed with the utmost
commitment, effort, and hard labor during the time allotted, and that no information
was obtained from an unauthorized data source. The research contents on this topic
are fully honest and have not been exploited or publicized in any way.
I guarantee that the master thesis was completed in accordance with the
Foreign Trade University's thesis writing regulation and methodology.
STUDENT: Le Duc Binh
iii
ACKNOWLEDGEMENT
The process of writing this thesis involves ongoing learning and research,
which results in not only the solutions offered in Chapter 3 of the thesis but also a
variety of experiences and information for the author. The author got
recommendations, contributions, and significant assistance in completing this thesis.
First, it is the author's honor and good fortune to be guided by Assoc. Prof. Dr.
TRINH Thi Thu Huong, my supervisor at Foreign Trade University, has extensive
knowledge and experience in the disciplines of law and conflict resolution, for which
I am grateful. I could not have finished this thesis without her advice and
recommendations.
Second, I would like to express my gratitude to the authors of the books and
publications cited in this thesis.
My final thanks go to the Faculty of Graduate Studies at Foreign Trade
University for providing us - the postgraduate students - with useful master courses
and assistance throughout the learning and thesis writing process.
Hanoi, July 7th
, 2023
Le Duc Binh
TABLE OF CONTENTS
STATEMENT OF ORIGINAL AUTHORSHIP .................................................. ii
ACKNOWLEDGEMENT...................................................................................... iii
TABLE OF CONTENTS.......................................................................................... i
LIST OF АBBREVIАTIONS................................................................................ iii
LIST OF TABLES.................................................................................................. iv
LIST OF FIGURES................................................................................................ iv
ABSTRACT...............................................................................................................v
INTRODUCTION ....................................................................................................1
1. Importance of the study ...............................................................................1
2. Literature review ..........................................................................................2
3. Research questions and scope .....................................................................6
4. Objectives ......................................................................................................7
5. Research methodology .................................................................................7
6. Structure of the thesis ..................................................................................8
CHAPTER 1: OVERVIEW OF DIGITAL TRANSFORMATION & TRADE
FACILITATION.......................................................................................................8
1.1. Overview of Digital Transformation ......................................................8
1.1.1. Understanding Digital Transformation ...........................................8
1.1.2. Digital Transformation strategy .....................................................10
1.1.3. Levels of digital transformation adaptation: .................................12
1.1.4. Digital transformation measures of success..................................13
1.1.5. Challenges and success factors of digital transformation............16
1.2. Overview of Trade Facilitation .............................................................17
1.2.1. Understanding Trade Facilitation..................................................17
1.2.2. The negotiation process of the WTO Trade Facilitation
Agreement (TFA).............................................................................................18
1.2.3. Structure of WTO Trade Facilitation Agreement .........................20
1.2.4. Meaning of WTO Trade Facilitation Agreement..........................22
1.3. Digital transformation in Trade facilitation........................................24
1.3.1. The impact of digitalization on trade: ............................................24
1.3.2. Digital Transformation in Facilitating Trade ...............................25
1.4. Experiences from other countries for digital transformation in
Trade Facilitation ...............................................................................................28
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v
vi
vi
vii
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1.4.1. The trend of other countries implementing digital transformation
in trade facilitation ..........................................................................................28
1.4.2. Experiences from some Asian countries........................................29
CHAPTER 2: SITUATION OF DIGITAL TRANSFORMATION ON
TRADE FACILITATION IN VIET NAM ..........................................................31
2.1. An overview of trade facilitation in Viet Nam before digital
transformation .................................................................................................31
2.1.1. Relative legal principles of digital transformation in Viet Nam ..36
2.1.2. Viet Nam’s current state of digital transformation .......................38
2.1.3. Viet Nam’s level of digital transformation adaptation: ................43
2.1.4. Vision and Goal of Digital Transformation in 2023 .....................45
2.2. The Situation of Digital Transformation in Viet Nam Trade
Facilitation...........................................................................................................47
2.2.1. Achievement in digitalizing trade facilitation of Viet Nam ..........47
2.2.2. Advantages of Viet Nam in digital transformation of trade
facilitation ........................................................................................................60
2.2.3. Limitations........................................................................................61
CHAPTER 3: RECOMMENDATIONS FOR VIET NAM IN DIGITAL
TRANSFORMATION ON TRADE FACILITATION......................................64
3.1. Key tasks for Viet Nam government and Customs sector......................64
3.2. Recommendations: ......................................................................................66
3.2.1. About the digital system of Viet Nam Customs ...................................66
3.2.2. About the quality of human resources.................................................71
3.2.3. Recommend the financial solutions.....................................................73
3.2.4. Recommend the Organizational solutions...........................................74
CONCLUSION .......................................................................................................75
REFERENCES........................................................................................................78
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LIST OF АBBREVIАTIONS
TFA Trade Facilitation Agreements
WTO World Trade Organization
UNCTAD United Nations Conference on Trade and Development
OECD Organisation for Economic Co-operation and Development
GATT General Agreement on Tariffs and Trade
NATF National Single Window and Trade Facilitation
VCCI Viet Nam Chamber of Commerce and Industry
WCO World Customs Organization
VASSCM Viet Nam Automated System for Seaport Customs
Management
VDCA Viet Nam Digital Communications Association
SDT Special and Differential Treatment
GVCs Global Value Chains
LPI Logistics Performance Index
SMEs Small and medium-sized enterprises
LDCs Developing and least-developed countries
IoT Internet of Things
KPI Key Performance Indicator
ROI Return on Investment
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LIST OF TABLES
Table 1: Comparing TFA content with the GATT principles ............................ 17
Table 2. Index of international trade performance in 2020 ................................ 47
LIST OF FIGURES
Figure 1. Trade Facilitation Performance in Viet Nam (2022) ............................. 24
Figure 2. Trading across Borders in Viet Nam – Time and Cost .......................... 48
Figure 3. Level of satisfaction of enterprises with methods of finding information
about administrative procedures ............................................................................ 56
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ABSTRACT
The thesis research conducted an assessment of the impact of digital
transformation on trade facilitation in Viet Nam, especially about customs
operation. The study aimed to understand the extent to which digital technologies
have influenced and improved trade processes, efficiency, and competitiveness in
the country.
The research employed qualitative data collection methods. The data was
gathered through research about trade facilitation with stakeholders including
government officials, industry representatives, and logistics providers.
The findings of the study revealed several significant outcomes. Firstly, it
was evident that digital transformation has had a positive impact on trade
facilitation in Viet Nam. The adoption of digital technologies, such as e-commerce
platforms, digital payment systems, and online documentation processes, has
streamlined trade procedures, reduced administrative burdens, and enhanced the
overall efficiency of cross-border transactions.
The research also highlighted the role of digital infrastructure in facilitating
trade facilitation. The development of robust internet connectivity, widespread
adoption of mobile devices, and the expansion of digital platforms have improved
access to markets, enhanced communication, and fostered collaboration among
businesses engaged in international trade.
Furthermore, the study identified various challenges and barriers to digital
transformation in trade facilitation. These included inadequate digital skills among
stakeholders, fragmented data systems, cybersecurity concerns, and the need for
regulatory reforms to accommodate the changing digital landscape. Addressing
these challenges will be crucial to ensure the sustained benefits of digital
transformation in trade facilitation.
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Based on the research findings, several recommendations were provided. It
was suggested that the Vietnamese government should continue investing in digital
infrastructure, promote digital literacy and skills development, and strengthen
cybersecurity measures to foster a secure and enabling environment for digital trade.
Collaboration among government agencies, businesses, and industry associations
was also emphasized to ensure effective implementation and coordination of digital
transformation initiatives.
In conclusion, the assessment of digital transformation on trade facilitation,
especially about customs operation in Viet Nam highlighted the positive impact of
digital technologies on streamlining trade processes and enhancing
competitiveness. However, challenges and barriers to digital transformation exist
and require attention. By addressing these challenges and implementing the
recommended strategies, Viet Nam can further leverage digital transformation to
boost trade facilitation, contribute to economic growth, and strengthen its position
in the global marketplace.
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1
INTRODUCTION
1. Importance of the study
Since Vietnam signed the Trade Facilitation Agreement (TFA) in 2015, trade
facilitation has played an essential role in reducing the cost of trade, which has
remained high despite the cost of transportation, the development of
telecommunications and information technology, and countries that have cut many
trade barriers. In today's global interactive economy, efforts to develop cooperation
in trade procedures and promote liberalization of trade policies have promoted
global trade and helped countries integrate into the production system. And in that
process, digital transformation offers a solution by leveraging technology to
streamline and modernize trade facilitation.
The traditional method can be called a paper-based process, it is slow,
inefficient, and causes a lot of errors which is the reason that caused the delay of
the trade process. By digitizing documentation, automating processes, and
implementing electronic platforms, trade facilitation can become faster, more
transparent, and cost-effective. Digitalization also enhances collaboration and
interoperability among stakeholders, facilitates risk management, and enables real-
time tracking and monitoring of shipments. Additionally, in the modern world of e-
commerce and global value chains, digital transformation is essential to improve
the efficiency of cross-border trade.
Researching the digital transformation of trade facilitation is crucial in
today's globalized and technologically advanced world. As trade facilitation
processes evolve and become increasingly digitalized, understanding the
implications, challenges, and opportunities that arise from this transformation is
important. Researching this area helps identify best practices, innovative solutions,
and policy recommendations to optimize the benefits of digital trade facilitation. It
enables governments, businesses, and stakeholders to stay informed about emerging
technologies, such as blockchain, artificial intelligence, and data analytics, and their
potential applications in streamlining and enhancing trade processes. Moreover, the
2
research sheds light on the digital divide, ensuring that the benefits of digital
transformation are inclusive and accessible to all, especially for developing
countries and small businesses. By investigating the digital transformation of trade
facilitation, policymakers and practitioners can make informed decisions, devise
effective strategies, and foster an enabling environment for seamless and efficient
cross-border trade in the digital age.
Also, digital transformation can impact the trade facilitate processes in Viet
Nam, with digital technology, the government can harmonize the procedure system.
The digital transformation has reduced the costs of engaging in international trade,
facilitated the coordination of global value chains (GVCs), helped diffuse ideas and
technologies, and connected a greater number of businesses and consumers
globally. But even though it has never been easier to engage in international trade,
the adoption of new business models has given rise to more complex international
trade transactions and policy issues.
The thesis aims to figure out the connection between digital transformation
and trade facilitation, especially in customs operation. Comparing the differences
of digital transformation on trade to other industries. In addition, by learning about
the current status of trade facilitation with the impact of digital technology in our
nation, the thesis also makes some recommendations on making the process more
efficient and improving awareness and application.
2. Literature review
Assessment of Digital transformation on trade facilitation is currently a topic
of great interest to academics as well as the government. WTO members concluded
negotiations at the 2013 Bali Ministerial Conference on the landmark Trade
Facilitation Agreement (TFA), which entered into force on 22 February 2017
following its ratification by two-thirds of the WTO membership. The TFA contains
provisions for expediting the movement, release and clearance of goods, including
goods in transit. It also sets out measures for effective cooperation between customs
and other appropriate authorities on trade facilitation and customs compliance
3
issues. It further contains provisions for technical assistance and capacity building
in this area. The TFA entered into force on 22 February 2017 after two-thirds of the
WTO members completed their domestic ratification process.
In 2015, Prof. Ph.D. Trinh Thi Thu Huong and Dr. Phan Thi Thu Hien shows
an overview of the TFA, the scope and topic of each article. This study gave a clear
look at the World Trade Organization Trade Facilitation Agreement.
Besides that, many authors in Vietnam have also conducted studies to give
basic and general views and analyze the provision of TFA in Vietnam. For instance,
in 2014, Lawyer Tran Huu Huynh, Former President of VIAC released “WTO
Facilitation Agreement, What do businesses get? What needs to be done?” on
Seminar Customs - business partnership in implementing the WTO Trade
Facilitation Agreement. The article was aimed at finding the impact and what needs
to be implemented to facilitate trade flow.
In early 2016, Jan Hoffman of UNCTAD published a study on "Trade
Facilitation and Development" which discussed the various relationships between
human and institutional development on the one side, and a country's capacity to
implement and benefit from the trade facilitation measures of the WTO Trade
Facilitation Agreement (TFA) on the other.
Some data of this thesis rely on the results of a survey by the Economic
Institute for ASEAN and East Asia (ERIA) in 2011 of firms in each of the 10 AMS
point to two trade facilitation measures as the top two concerns of the ASEAN
private sector for implementation by 2015: (i) improve import and customs
administration efficiency and integrity; and (ii) streamline and expedite import and
customs procedures, documents, etc. (Intal, Narjoko, and Simorangkir, 2011: 45-
46).
Also, the Doing Business Annual Report in the last 5 years and other
documents by the World Bank bring a closer look as proof to review the impact of
trade facilitation in trade in general and Vietnamese trade in specific.
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The integration of modern digital technology into diverse sectors has
emerged as a disruptive force around the world, influencing economies and
industries. Digital transformation is especially important in the context of
international trade because of its potential to redefine trade facilitation systems.
This literature study provides a complete overview of the relevant research on
assessing the influence of digital transformation on trade facilitation, with a
particular focus on its implications for Vietnam. The analysis delves into the many
facets of digital transformation, including its role in trade facilitation and the
difficulties and opportunities it brings.
Digital Transformation and Trade Facilitation:
Digital transformation includes the strategic application of digital
technologies such as artificial intelligence, big data, blockchain, and the Internet of
Things to radically redesign organizational operations. Similarly, trade facilitation
refers to the modernization, simplicity, and harmonization of cross-border trade
procedures. Customs clearance, logistics, regulatory compliance, and information
sharing are examples of these. The link between digital transformation and trade
facilitation is found in the use of technology to streamline these operations, decrease
costs, and improve efficiency.
Trade facilitation benefits greatly from digital change. It increases efficiency
by automating labor-intensive, manual operations, decreasing paperwork, and
accelerating cross-border trade. Furthermore, digital technologies enable real-time
data sharing among stakeholders, which improves transparency, lowers the risk of
fraudulent activity, and reduces corruption. The decrease in trade costs, including
administrative hurdles, transportation costs, and trade-related delays, is a
fundamental effect of these developments, ultimately contributing to increased
competitiveness for enterprises participating in international trade.
Digital Transformation Initiatives in Vietnam:
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Vietnam has actively pursued e-government initiatives aimed at digitizing
governmental functions and enhancing public service delivery. These initiatives,
including the implementation of the National Single Window (NSW) system, have
direct implications for trade facilitation. The NSW system has streamlined customs
processes by enabling electronic submission of trade-related documents, leading to
reduced clearance times and costs for businesses engaged in international trade.
Challenges and Considerations:
While the advantages of digital transformation in trade facilitation are
evident, several challenges and considerations demand attention. The digital divide,
characterized by disparities in access to and proficiency with digital technologies,
can exacerbate inequalities, particularly among small and medium-sized enterprises
(SMEs) in Vietnam. Cybersecurity and data privacy concerns must also be
addressed as digital trade processes expand, underscoring the importance of robust
protection measures and appropriate regulations. A supportive regulatory
framework is crucial to ensure the secure and effective deployment of digital
technologies within trade facilitation processes.
In the context of Vietnam's evolving trade landscape, the assessment of
digital transformation's impact on trade facilitation is a critical area of research.
While some studies have explored this intersection, there remains a notable research
gap that warrants investigation. Specifically, there appears to be a dearth of research
focusing on specific industries or sectors within the country, potentially overlooking
key disparities and opportunities. Additionally, the regulatory and policy
frameworks governing digital transformation in the context of trade facilitation in
Vietnam have not been thoroughly analyzed. By addressing these gaps in the
literature, this thesis aims to contribute to a more holistic understanding of how
digital transformation is shaping trade facilitation in Vietnam, with implications for
policy formulation and industry strategies.
At the end of this paper, it is expected to give an overview of the applying
status of digital transformation during TFA and their relationship in the last 7 years
6
since Vietnam signed the Trade Facilitation Agreement. In addition, the content of
the study also presents the situation of applying digital transformation to trade
facilitation in Vietnam: presenting the process and related regulations. In the
context of Vietnam joining the generational Free Trade Agreements (FTAs), our
country needs to apply digital methods to enhance the effectiveness of TFA.
Therefore, more analysis and evaluation studies are needed to make
recommendations on this issue.
3. Research questions and scope
The thesis raises the following questions: How facilitating trade was
processed in Vietnam, especially about customs operations? How digital
transformation was applied in facilitating trade? What advantages or disadvantages
does Vietnam have when implementing TFA, and also when applying digital
transformation in trade facilitation? What solutions are needed to ensure that
Vietnam will implement these digital technologies in facilitating trade well? To
answer the above questions, the tasks of this study are to:
- Research theoretical issues on trade facilitation, and digital transformation.
- Learn about the provision of WTO’s Trade Facilitation Agreement and the
provision of Vietnamese government on international.
- Analyzing the current status of digital transformation, trade facilitation on its
own, and trade facilitation with the support of digital technology in general
and the Custom operation of Vietnam in particular, including accessing the
compatibility between Vietnam domestic laws and regulations. From that,
the thesis mentions recommendations that help enhance technology skills
and adaptations in the Fourth Industrial Revolution, besides that, raising
awareness about digital transformation.
The scope of the content of this thesis contains the practical issues of trade
facilitation and digital transformation, explains their relationship, and how they
7
impact each other, especially in the Customs sector (General Department of Viet
Nam Customs). It also includes the regulations related to this topic.
The thesis's time scope is from when Vietnam signed the Trade Facilitation
Agreement in 2015 until now. The study's recommendation can be applied from
now until there is a regulation directly adjusting the process of digital
transformation applied to trade facilitation.
4. Objectives
The thesis aims to comprehensively evaluate the impact of digital
technologies on trade facilitation in the country. It seeks to analyze how the
adoption and integration of digital tools and platforms have influenced trade
processes, efficiency, and competitiveness. The thesis aims to examine the role of
digital transformation in enhancing market access and global connectivity,
assessing the cost implications, analyzing the impact on transparency and trust, and
identifying challenges and barriers to successful implementation. By achieving
these objectives, the thesis aims to provide valuable insights and recommendations
for maximizing the benefits of digital transformation in trade facilitation, thus
contributing to the overall understanding and advancement of digitalization in the
Vietnamese trade sector.
5. Research methodology
During the research process of this thesis, the author has applied the
Secondary data analysis method. This method also known as archival study, is
studying and assessing research that already exists, this the thesis will collect legal
documents, and economic information through historical research methods and then
classify and systematize them.
Utilizing a diverse range of existing data sources, including trade statistics
from Vietnam Customs, government reports, international organization data, and
academic research, this approach seeks to explore and elucidate the multifaceted
dynamics of digitalization within the context of trade facilitation. By systematically
8
defining research questions, retrieving and preparing relevant datasets, applying
rigorous analytical techniques, and validating findings against existing literature
and reports, this research aims to provide empirical evidence and insights into the
transformative effects of digital technologies on the trade landscape in Vietnam.
Furthermore, ethical considerations pertaining to data privacy and citation integrity
will be meticulously adhered to throughout the secondary data analysis process.
Through this methodological approach, this study aspires to contribute valuable
insights and inform policy recommendations, thereby advancing knowledge in the
field of digital transformation and trade facilitation.
Besides that, the thesis will observe the real situation of implementing TFA and
applying digital technology to trade facilitation of the Vietnamese Government and
based on particular experiences from Vietnam, give recommendations for Vietnam by
professional solution method. This methodological option provides a unique lens
through which to explore the issue, carefully examining important venues, processes,
and parties involved in trade facilitation, such as customs offices, logistics hubs, and
government agencies.
6. Structure of the thesis
The thesis included the following four chapters:
Chapter 1: Overview of Digital Transformation & Trade Facilitation
Chapter 2: Situation of applying digital transformation to trade facilitation in Viet
Nam
Chapter 3: Recommendations for Viet Nam in Digital Transformation on Trade
Facilitation.
CHAPTER 1: OVERVIEW OF DIGITAL TRANSFORMATION & TRADE
FACILITATION
1.1. Overview of Digital Transformation
1.1.1. Understanding Digital Transformation
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Digital Transformation is a wide-known term lately, and it has become a
strategic imperative on leadership agendas. Digital transformation is the process of
total and comprehensive change of individuals and organizations in the way of
living, working and production methods based on digital technologies. It is the
process that an organization applies to integrate digital technology in all types of
areas, fundamentally changing how it delivers value to people; and make cultural
and operational shifts that adapt better to changing people's demands.
According to The International Business Machines Corporation (IBM),
digital transformation approaches all parts of an organization, from its business
models to customer experiences to procedures and operations, with a customer-
driven, digital-first mindset. It leverages data to enable intelligent workflows, faster
and smarter decision-making, and real-time response to market disruptions using
AI, automation, hybrid cloud, and other digital technologies. Finally, it alters client
expectations and opens up new business prospects.
Its goal is to build a technical and operational foundation, to evolve and
respond in the best possible way to unpredictable and ever-changing customer
expectations, market conditions, and local or global events.
The framework of digital transformation
Any system for general and government systems for specific going through
a digital transition should have a change management strategy, which is what a
digital transformation framework is. A framework is a tool that supports
transformation at all organizational levels and within individual departments.
A framework supports digital transformation by outlining best practices and
processes to do the following (IBM):
 Analyze the impact of change across all areas of the organizations
 Manage the change effectively and efficiently
 Plan the steps to implement the transformation
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 Identify metrics to measure the benefits the change brings
 Clarify ways to progress along your digital transformation journey
1.1.2. Digital Transformation strategy
According to Amazon Web Services, which is the world's most
comprehensive and broadly adopted cloud, they offer over 200 fully featured
services from data centers globally, AWS offers many different tools and solutions
for enterprises and software developers that can be used in data centers in up to 190
countries for government agencies, education institutions, non-profits and private
organizations, digital transformation strategy is a comprehensive plan for
accomplishing both short- and long-term digital transformation in any organization.
It takes the following factors into account:
• Leaders who initiate and drive the transformation
• Investment and financial planning
• Key performance indicators (KPIs) to measure the return on investment
(ROI)
• Tools and processes that will support the transformation
• External resources and third-party experts
• The impact of transformation on people
The four steps to building successful digital transformation plans are outlined
below:
Align your digital transformation with your company objectives:
Digital transformation project planning should be centered on your
organization's overall goals rather than a specific technology. Your major emphasis
11
areas will also assist in determining KPIs, keeping the transformation measurable,
and reducing the time to value.
Create a proof of concept
The most effective initial projects can produce measurable results in less than
six months. It is preferable to create first initiatives that show ROI and gain support
from the leadership. These early prototypes can then be modified and spread
throughout the organization.
An approach for implementing technology
You can utilize a variety of methods in digital transformation to change your
organization. Here are a few of these technologies:
• Mobile technologies, like customer-facing applications and internal
applications that improve productivity
• Internet of Things, like smart sensors and intelligent devices that
automatically connect to the internet and collect data
• Cloud technologies, especially cloud computing and cloud storage
• Artificial intelligence and machine learning for data analytics and decision-
making
• Augmented and virtual reality for immersive customer engagement
• Robotics for operational efficiency
By implementing these technologies, you may see a significant change in
how customers and workers engage with your organization. To train your
employees and improve the capabilities of your company, you might also need to
enlist the aid of other partners and specialists.
Collect feedback and improve the digital transformation approach
12
It is critical to include strong feedback loops in your digital transformation
project planning. By gathering regular input from stakeholders, you can ensure that
everyone learns from the experience and grows dynamically. Because digital
transformation is a journey, including milestones in your timeline allows you to be
flexible and make changes as needed.
1.1.3. Levels of digital transformation adaptation:
Digital transformation can be conceptualized as a multi-level process,
characterized by varying degrees of integration and maturity within organizations.
These levels of digital transformation provide a framework for understanding the
evolution and progression of digital initiatives. At the initial stage (Level 1),
organizations are in the early phases of digital transformation, with limited
implementation and exploration of digital technologies. Digital initiatives are often
ad-hoc and lack a strategic, organization-wide approach.
Moving to Level 2, organizations enter the functional stage, where digital
technologies are selectively implemented within specific departments or functions.
The focus is on improving specific areas such as marketing, sales, or customer
service. This stage marks a transition from isolated digital initiatives to more
structured and targeted efforts. However, the transformation is still limited in scope
and lacks integration across the entire organization.
As organizations advance to Level 3, digital transformation progresses
towards business process integration. At this stage, organizations embrace end-to-
end automation and digitization of core business processes. Digital technologies are
integrated into workflows, leading to increased efficiency, streamlined operations,
and enhanced collaboration across functions. Data sharing and integration become
more prevalent, enabling organizations to derive valuable insights and make data-
driven decisions.
Level 4 represents a significant milestone in digital transformation,
characterized by business model transformation. Organizations undergo
13
fundamental changes to their business models and strategies, driven by digital
technologies. The integration of digital initiatives becomes deeply ingrained in the
organization's DNA, resulting in innovative business models, new revenue streams,
and disruptive changes in the market. At this stage, organizations become agile and
adaptable, leveraging digital technologies to create unique value propositions and
respond swiftly to market dynamics.
Reaching the pinnacle of digital transformation, Level 5, entails ecosystem
transformation. Organizations collaborate with external partners, customers, and
suppliers to create a digital ecosystem that transcends industry boundaries.
Emerging technologies, such as artificial intelligence, blockchain, and the Internet
of Things, are leveraged to establish interconnected ecosystems. These ecosystems
enable seamless integration and collaboration among diverse stakeholders, fostering
innovation, and driving holistic digital transformation.
It is important to note that these levels of digital transformation serve as a
guide and may not be strictly sequential or applicable to every organization. The
progression through these levels depends on various factors, including industry,
organizational size, and strategic objectives. Nonetheless, understanding these
levels helps organizations gauge their position in the digital transformation journey
and plan their future initiatives accordingly.
1.1.4. Digital transformation measures of success
Measuring the success of digital transformation initiatives is essential to
evaluate the effectiveness of these efforts. One key measure of success is cost
efficiency and return on investment (ROI). By assessing the financial impact of
digital transformation, organizations can determine the cost savings, increased
productivity, and efficiency gains resulting from digitalization. This evaluation
helps in understanding the overall ROI and the financial benefits derived from
digital transformation initiatives.
14
Customer satisfaction and experience play a vital role in measuring the
success of digital transformation. Improving customer satisfaction and enhancing
the overall customer experience are primary objectives of digital initiatives. Metrics
such as customer feedback, Net Promoter Score (NPS), customer retention rates,
and conversion rates can provide insights into the impact of digital transformation
on customer satisfaction, loyalty, and business performance.
Business agility and flexibility are critical factors in the success of digital
transformation efforts. The ability to respond quickly to changing market conditions
and customer needs is a key goal of digital initiatives. KPIs such as time-to-market,
speed of product or service innovation, and adaptability to market changes can help
organizations evaluate the success of their digital transformation in improving
business agility and staying competitive in dynamic markets.
Employee productivity and engagement are important measures of success
in digital transformation. Engaging and empowering employees through digital
initiatives can lead to increased productivity and satisfaction. Metrics such as
employee satisfaction surveys, productivity levels, employee feedback, and
retention rates can provide insights into the effectiveness of digital transformation
initiatives in enhancing employee engagement and productivity.
Process efficiency and automation are core objectives of digital
transformation. By streamlining and automating business processes, organizations
aim to improve operational efficiency and reduce costs. KPIs such as process cycle
time, error rates, process cost reduction, and efficiency gains can be used to measure
the success of digital initiatives in optimizing workflows and automating repetitive
tasks.
Data-driven decision making is a fundamental aspect of successful digital
transformation. Organizations leverage data analytics, business intelligence tools,
and data-driven decision-making frameworks to make informed decisions.
Evaluating the effectiveness of these initiatives can be done by assessing the impact
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of data-driven insights on decision-making quality, efficiency, and business
outcomes.
Technology adoption and integration are critical for successful digital
transformation. Measuring the level of technology adoption across the organization,
as well as the success of system integration efforts, provides insights into the
progress of digital transformation. KPIs such as the percentage of employees trained
on new technologies, system integration success rates, and the level of technology
utilization can indicate the success of digital initiatives in driving technological
advancements within the organization.
Competitive advantage and market positioning are outcomes organizations
strive for through digital transformation. Assessing factors such as market share,
customer acquisition, brand value, and industry rankings helps organizations
evaluate the impact of digital initiatives on their competitive position. By measuring
these indicators, organizations can determine the success of their digital
transformation in enhancing their market position and gaining a competitive edge.
Security and risk management are critical considerations in digital
transformation. Organizations must address cybersecurity challenges and
effectively manage risks associated with digital initiatives. Evaluating KPIs such as
the number of security incidents, risk mitigation effectiveness, and compliance with
regulatory standards provides insights into the success of digital initiatives in
ensuring a secure and resilient digital environment.
Stakeholder satisfaction is a comprehensive measure of the success of digital
transformation. It involves assessing the satisfaction of various stakeholders,
including customers, employees, partners, and investors. Surveys, feedback
mechanisms, and stakeholder interviews can be used to gather feedback and
measure satisfaction levels, providing organizations with a holistic view of the
success of their digital transformation efforts.
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1.1.5. Challenges and success factors of digital transformation
A successful digital transformation journey comes with its own set of
challenges. This section explores the key challenges organizations face when
undertaking digital transformation initiatives and identifies the success factors that
can help organizations navigate and overcome these challenges.
Legacy Systems and Infrastructure: One of the primary challenges in digital
transformation is dealing with legacy systems and outdated infrastructure. Many
organizations have complex, monolithic IT systems that are not designed to be
easily integrated with modern digital technologies. The cost and complexity of
modernizing these systems can pose a significant hurdle. Success in digital
transformation often requires a careful evaluation of existing systems, prioritizing
investments in technology upgrades, and adopting agile development practices.
Organizational Resistance and Culture: Organizational resistance to change
can impede digital transformation efforts. Employees may be resistant to new
technologies, and unfamiliar processes, or fear the impact of automation on their
roles. Overcoming resistance and fostering a digital culture requires strong
leadership, effective communication, and a clear vision for the benefits of digital
transformation. Engaging employees, providing training and support, and creating
a culture of continuous learning and innovation are critical success factors.
Talent Acquisition and Skill Gaps: Digital transformation requires a
workforce with the right skill sets to leverage emerging technologies and drive
innovation. However, there is often a shortage of digital talent in the market, and
organizations may struggle to attract and retain skilled professionals. Success in
digital transformation involves identifying skill gaps, investing in training and
upskilling programs, and creating a talent acquisition strategy that aligns with the
organization's digital goals.
Data Security and Privacy: As organizations embrace digital technologies,
data security, and customer privacy are paramount. Cybersecurity threats are
17
constantly evolving, and organizations must invest in robust security measures to
safeguard sensitive data. Compliance with data protection regulations, such as the
General Data Protection Regulation (GDPR), is also critical. Success in digital
transformation requires a proactive approach to security, including implementing
encryption, access controls, and regular security assessments.
Strategic Planning and Execution: Digital transformation initiatives must be
aligned with the organization's overall strategy and goals. A lack of strategic
planning and alignment can result in fragmented efforts, duplication of investments,
and suboptimal outcomes. Success in digital transformation involves developing a
clear digital strategy, setting measurable goals, and establishing a roadmap for
implementation. Effective project management and execution, with dedicated
resources and accountability, are key success factors.
Collaboration and Partnerships: Digital transformation often requires
collaboration and partnerships with external stakeholders, such as technology
vendors, startups, and industry collaborators. Organizations may lack the necessary
ecosystem and networks to access the right expertise and technologies. Success in
digital transformation involves identifying and nurturing strategic partnerships,
participating in industry collaborations, and leveraging external expertise to
accelerate innovation and overcome challenges.
1.2. Overview of Trade Facilitation
1.2.1. Understanding Trade Facilitation
Trade Facilitation Agreement (TFA) is a global multilateral initiative to
promote trade efficiency and economic growth worldwide by restricting excessive
border bureaucracy, enhancing transparency, and leveraging emerging
technologies. The TFA entered into force in 2017 following its ratification by two-
thirds of the World Trade Organization (WTO) membership. According to
estimates, the full implementation of the TFA measures will boost global trade by
up to USD 1 trillion annually and lower average trade costs globally by about
18
14.3%, with a reduction of 14.1% for low-income countries, 15.1% for middle-
income countries, and 12.9% for high-middle income countries (World Trade
Report 2015).
According to Organisation for Economic Co-operation and Development
(OECD), in an interconnected world where goods often cross borders many times
as both intermediate and final products, and against a background of supply chain
disruptions, trade facilitation policies can:
 Allow better access for organizations to production inputs from abroad and
support greater participation in global value chains, including small- and
medium-sized enterprises (SMEs).
 Help lower overall trade costs and increase economic welfare, in particular
for developing and emerging economies.
 Ensure the timely delivery of medical goods and perishable agricultural
products, both of which are highly sensitive to delays.
 Promote the resilience of global supply chains and help meet the challenges
and seize the opportunities of the digital and green transitions.
Trade facilitation is becoming more and more essential. The increasing
quantity of shipments crossing international borders increases demand while also
posing new obstacles for trade facilitation. Furthermore, in response to the issues
posed by the COVID-19 pandemic at borders, many economies boosted their use of
digital tools to develop initiatives targeted at simplifying trade processes and
documenting requirements.
1.2.2. The negotiation process of the WTO Trade Facilitation Agreement (TFA)
TFA or Global customs rules are agreements adopted on the principle of
consensus agreement of 160 member countries of the WTO. The process of
negotiating the content of the Agreement started in July 2004. This is one of
important work programs of the WTO Doha Round. The content of the Agreement
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negotiated by member states judgments toward those fundamental goals are: (1)
facilitate trade, ensure the balance between trade facilitation and ensure compliance
with the law; (2) promote good fortune transfer, customs clearance of goods in trade
international trade; (3) promote synergies between customs and other agencies in
the process international movement of goods; (4) promote support technical
assistance and capacity building of countries WTO members.
In 2013, Ministerial Conference in Bali, Indonesia approved the Bali
Declaration on Agreement content as well as the approval and signing process TFA
end. The Bali Declaration adopted several significant Agreement-related issues,
including:
 Agree on the content of the Agreement in terms of text and structure,
 Establishment of an Interim Committee to review the TFA legislation, draft
the TFA Amendment Protocol as well as the Protocol ratification process.
 Receiving commitments to implement Group A measures from developing
country member countries.
 On November 24, 2014, Protocol amending the WTO Agreement was
approved and ratified by the WTO. From this moment, the Decree is open
for ratification by Members. When two-thirds of the member countries
complete the ratification, the Agreement will enter into force.
Table 1: Comparing TFA content with the GATT principles
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TFA Articles Scope GATT Articles
Articles 1 to 5 Transparency Article X
Articles 6 to 10 Fees and Procedures Article VIII
Article 11 Transiting Articles Article V
Articles 12 Other problems
1.2.3. Structure of WTO Trade Facilitation Agreement
The Trade Facilitation Agreement aims to streamline and simplify customs
procedures, enhance transparency, and promote efficiency in cross-border trade.
The structure of the TFA included these sections:
First is Preamble
The preamble provides an introduction to the agreement, outlining the
importance of trade facilitation for economic development, job creation, and
poverty reduction. It highlights the principles of non-discrimination, transparency,
and cooperation among WTO members.
Section I: Provisions
It contains provisions for expediting the movement, release and clearance of
goods, including goods in transit. It clarifies and improves the relevant articles (V,
VIII and X) of the General Agreement on Tariffs and Trade (GATT) 1994. It also
sets out provisions for customs cooperation. This section provides 12 articles
(technical measures to facilitate trade following the Agreements).
About transparency:
 Article 1: Publication and Availability of Information
 Article 2: Opportunity to comment, Information before entry into
force, and Consultations
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 Article 3: Advance rulings
 Article 4: Procedures for Appeal or Review
 Article 5: Other Measures to Enhance Impartiality, Non-
discrimination, and Transparency.
Fees and procedures:
 Article 6: Disciplines on Fees and Charges imposed on or in
connection with Importation and Exportation and Penalties
 Article 7: Release and Clearance of Goods
 Article 8: Border agency cooperation
 Article 9: Movement of Goods intended for import under Customs
Control
 Article 10: Formalities Connected with Importation, Exportation and
Transit.
Freedom of Transit:
 Article 11: Freedom of Transit
Customs Cooperation:
 Article 12: Customs Cooperation
Section II: Special and Differential Treatment – SDT
This part has 10 articles containing special and differential treatment (SDT)
provisions that allow developing and least-developed countries (LDCs) to
determine when they will implement individual provisions of the Agreement and to
identify provisions that they will only be able to implement upon the receipt of
technical assistance and support for capacity building. To benefit from SDT, a
member must categorize each provision of the Agreement, as defined below, and
notify other WTO members of these categorizations following specific timelines
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outlined in the Agreement. The roadmap for the implementation of groups A, B and
C of developing and least developed countries is shown in the following figure:
Category Timeline Requirements
A Implement by the time the
Agreement enters into force (or in
the case of a least-developed country
within one year after entry into
force)
N/A
B Implement after a transitional period
following the entry into force of the
Agreement
N/A
C Implement on a date after a
transitional period following the
entry into force of the Agreement.
The acquisition of
assistance and support
for capacity building.
Section III contains provisions that establish a permanent committee on trade
facilitation at the WTO, require members to have a national committee to facilitate
domestic coordination and implementation of the provisions of the Agreement. It
also sets out a few final provisions.
Overall, the structure of the TFA provides a comprehensive framework for
promoting and implementing trade facilitation measures among WTO members. By
addressing specific areas of customs procedures, establishing institutional
mechanisms, and ensuring support for developing countries, the TFA aims to
streamline international trade, enhance transparency, and promote economic
growth.
1.2.4. Meaning of WTO Trade Facilitation Agreement
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The importance and necessity of the Agreement on International Trade in the
contemporary global context can be seen in the following aspects:
First, 160 WTO members are regarded as having agreed to the TFA as a
means of facilitating trade. The Agreement establishes a mechanism for the WTO
to enforce and keep track of the development of global trade facilitation. From the
standpoint of state management in general and national borders in particular, TFA
is regarded as an effective tool to harmonize, make transparent, and standardize
legal norms and legal practice on inspection and supervision of the movement of
products in international trade.
Second, TFA helps to lower trade barriers, particularly non-tariff and
technical ones that nations erect to safeguard intraregional and international
commerce. The development of global trade has been and will continue to be
significantly hampered by non-tariff and technical barriers, which raise the costs
and duration of international trade transactions.
Third, national border and customs enforcement agencies are becoming more
crucial to global trade. The customs authorities of every nation are currently
continually extending their activities to many other domains, such as: fighting
terrorism, in addition to their core job of inspecting and monitoring the movement
of commodities in international trade. Distribution and trade of illegal weapons,
defense of intellectual property rights, assurance of food security, etc. This
necessitates a legally enforceable process as well as good coordination among the
parties on a global basis, which is the WTO's TFA.
Fourth, the TFA, like other major WTO agreements, is very binding and
flexible for member nations due to its dispute resolution structure and special
treatment provisions for countries. undeveloped, as well as underdeveloped.
Furthermore, the WTO Trade Facilitation Committee and the country work together
to monitor and correct issues that arise in trade facilitation enforcement in order to
accomplish the WTO's trade facilitation goals (Trinh Thi Thu Huong/ Phan Thi Thu
Hien 2015, p.24).
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1.3. Digital transformation in Trade facilitation
1.3.1. The impact of digitalization on trade:
Digitalization expands the scale, scope, and speed of trade. It enables
businesses to introduce new products and services to a bigger number of digitally
connected clients around the world. It also enables firms, particularly smaller ones,
to use new and innovative digital tools to overcome growth barriers, such as
facilitating payments, enabling collaboration, avoiding fixed asset investment
through the use of cloud-based services, and utilizing alternative funding
mechanisms such as crowdfunding.
The way we trade goods is also changing as a result of digitalization. For
example, the rise of online platforms has resulted in an increase in the number of
small packages traded across international borders. This raises several policy issues
for policymakers, ranging from the physical management of parcel trade to the
implications for risk management (such as counterfeit goods or biosecurity
standards) and revenue implications in terms of tax and tariff collection.
At the same time, new business models and technological advancements are
altering the way services are generated and provided, concealing already blurry
boundaries between commodities and services and modes of distribution and
bringing novel combinations of the two. For example, a smart fridge needs market
access for both the integrated service and the product. Additionally, a product made
via 3D printing, for instance, may cross an international border as a design service
but transforms into good at the point of consumption. Together, these problems
present new challenges for the formulation of global trade and investment policy.
Rapid developments in technology also help services to become more
prevalent in cross-border international trade. The foundation of digital trade is made
up of information and communication technology services, which also support the
digitization of other types of services by providing the necessary network
infrastructure. The development of digitally enabled services, which are supported
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by a number of new services built on data-driven creative solutions like cloud
computing, has also been made easier by new technology.
In the digital age, old trade issues may have new consequences, such as the
effects of burdensome border procedures on parcel trade or restrictions on newly
tradable services, and new trade policy issues, such as differing regulations among
nations about data flows, are emerging. More knowledge about the nature and scope
of these developments is required to assist policymakers in creating an environment
that encourages innovation and supports digital trade in goods and services.
1.3.2. Digital Transformation in Facilitating Trade
Digital transformation and trade facilitation are deeply interconnected,
shaping the modern landscape of global commerce. Digital transformation refers to
the adoption of digital technologies and processes to revolutionize business
operations, while trade facilitation focuses on removing barriers and streamlining
procedures to enhance international trade. The relationship between these two
concepts is symbiotic, with digital transformation empowering trade facilitation
efforts and trade facilitation driving the need for digital transformation.
The Agreement contains several provisions that require, or encourage, the
use of digital technology, such as publication of information and forms on the
Internet, electronic payment of duties and charges, and a single window for
submission of import, export, and transit documentation.
One of the primary ways digital transformation enhances trade facilitation is
through automation and efficiency. By digitizing trade-related processes, such as
documentation and customs procedures, businesses and governments can eliminate
manual tasks, reduce paperwork, and expedite trade transactions. Automated
systems enable faster processing times, minimize errors, and optimize resource
allocation. This efficiency translates into significant time and cost savings for
businesses, making trade more seamless and attractive.
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Another vital aspect of the relationship between digital transformation and
trade facilitation is the transition toward paperless trade. Through the digitization
of trade documents, electronic signatures, and the implementation of digital
platforms, the reliance on physical paperwork diminishes. This transition offers
numerous benefits, including faster document processing, improved data accuracy,
and enhanced security. Paperless trade reduces administrative burdens, simplifies
cross-border transactions, and promotes interoperability between trading partners.
Digital transformation also facilitates data sharing and connectivity, key
elements in effective trade facilitation. By establishing digital platforms and
information-sharing systems, stakeholders involved in international trade, such as
businesses, customs authorities, and logistics providers, can exchange data in real-
time. This connectivity enhances collaboration, transparency, and coordination
throughout the supply chain. Timely access to accurate information enables
stakeholders to make informed decisions, minimize delays, and address potential
bottlenecks swiftly.
The more advanced technologies such as blockchain, the internet of things,
data analytics, artificial intelligence, and machine learning can greatly enhance the
sharing, collection, analysis, and use of data which is important for many trade
facilitation measures.
Supply chain visibility is another critical aspect of the relationship between
digital transformation and trade facilitation. Digital technologies, such as IoT,
RFID, and blockchain, enable real-time tracking and tracing of goods throughout
the supply chain. This visibility ensures greater transparency and accountability,
enabling businesses and authorities to identify potential risks, optimize inventory
management, and enhance overall supply chain efficiency. Enhanced visibility
improves trade facilitation by reducing uncertainties, facilitating risk management,
and enabling prompt responses to disruptions.
Furthermore, digital transformation contributes to enhanced compliance and
risk management in trade facilitation. Advanced digital platforms can integrate risk
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assessment tools, automated compliance checks, and data analytics to identify and
mitigate potential risks in trade transactions. By automating compliance procedures
and leveraging data-driven insights, businesses and authorities can ensure
adherence to trade regulations, mitigate fraud and security threats, and maintain the
integrity of cross-border trade. This strengthens trust among trading partners and
enhances overall trade facilitation efforts.
Lastly, digital transformation expands access to global markets, particularly
for small and medium-sized enterprises (SMEs). Through e-commerce platforms,
digital marketplaces, and online marketing channels, businesses can reach
customers worldwide and participate in international trade. Digital technologies
enable SMEs to overcome traditional barriers to entry, such as geographical
constraints and limited resources. This broader access to global markets fosters
entrepreneurship, stimulates economic growth, and promotes inclusivity in trade
facilitation.
Customs administrations are already using these technologies to validate
certifications of origin, improve risk management and customs audit, increase
efficiency in customs clearing, and eliminate manual procedures. However,
implementing new technologies can be costly and difficult. Prior to implementation,
a member should assess the technologies and needs of border agencies and develop
a technology strategy with assistance from the business sector.
To conclude, digital transformation and trade facilitation share a mutually
reinforcing relationship. Digital transformation empowers trade facilitation efforts
by automating processes, enabling paperless trade, enhancing data sharing,
improving supply chain visibility, and facilitating compliance. On the other hand,
trade facilitation drives the need for digital transformation by demanding
streamlined and efficient trade processes. Embracing digital transformation in trade
facilitation can lead to more seamless, efficient, and inclusive international trade,
benefiting businesses, governments, and consumers alike.
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1.4. Experiences from other countries for digital transformation in Trade
Facilitation
1.4.1. The trend of other countries implementing digital transformation in trade
facilitation
In the world, facilitating trade has appeared many times ago, a lot of states
and organizations had started to apply digital transformation to enhance their trade
sector, to facilitate trade flows. For instance, The World Customs Organization
(WCO) has proposed a model for customs development called "Customs in the
Digital Age" consisting of six stages (Stage 1: Electronic Customs Startup; Stage 2:
Electronic Customs Preliminary; Stage 3: In-depth Electronic Customs for Each
Sector; Stage 4: Integrated Electronic Customs; Stage 5: Advanced Electronic
Customs; Stage 6: Digital Customs).
Currently, customs administrations worldwide are focusing on building
digital customs agencies, with a major emphasis on digitization and the application
of Fourth Industrial Revolution technologies. The development plan of the United
States Customs and Border Protection for the period 2021-2025 also highlights the
specific goal of digital transformation. This includes making data-driven decisions
and timely data analysis. To achieve this objective, the US Customs and Border
Protection has identified three key activities to be implemented during the period
2020-2025: the use of modern analytical techniques, enhancing the IT system for
high-quality data collection and connectivity, and sharing data and analytical
techniques. Additionally, the US Customs and Border Protection has established an
Innovation and Technology Improvement Team within its Office of Trade,
responsible for researching, proposing, and implementing the latest technologies to
enhance border operations, with a focus on four areas: increasing automation,
AI/advanced analytics, sensors and data sharing, and information.
From 2021 to 2025, the Canada Border Services Agency has developed and
implemented a digital transformation strategy with a focus on improving its IT
system and data analysis. This strategy includes establishing central-level
29
organizational management structures, as well as investments in three main areas:
data management, business intelligence (BI), and advanced analytics. Similarly,
China Customs is currently developing an IT system to support its intelligent
customs management, with a focus on digital transformation and the application of
Industry 4.0 technologies to meet the requirements of smart customs management.
Furthermore, customs administrations in Japan, South Korea, and the European
Union (EU) are also actively promoting digital transformation and the application
of Industry 4.0 technologies, such as Artificial Intelligence (AI), Big Data,
Blockchain, and Internet of Things (IoT) connectivity. As a result, the level of ICT
application in customs administrations in these developed countries has reached
advanced stages, as outlined in the "Customs in the Digital Age" model (levels 5
and 6).
In 2022, under the theme "Promoting Digital Customs Transformation
through Data Exploitation Culture and Building Data Ecosystem," the World
Customs Organization (WCO) emphasized another aspect of digital customs, which
is the importance of available data, cooperation with relevant parties to collect
quality data, and leveraging this data for customs operations.
In conclusion, smart customs, digital customs, or intelligent borders are
essential processes that involve the application, utilization, and integration of
modern technologies and data into customs operations and procedures to fulfill the
fundamental tasks of customs agencies, which are to facilitate trade, collect revenue,
and ensure security and societal safety. This process, though known by various
names such as automated customs, intelligent customs, digital customs, or under
programs of innovation, reform, and modernization, takes place at different levels
in each country, depending on its level of development. The varying levels of
technology application and the recent emphasis on "data" can be understood as the
stages outlined in the WCO's "Customs in the Digital Age" development model.
1.4.2. Experiences from some Asian countries
30
Several Asian countries have been at the forefront of applying digital
transformation to facilitate trade, resulting in significant improvements in trade
efficiency and competitiveness. One notable example is Singapore, which has been
a leader in embracing digital solutions for trade facilitation. Singapore's TradeNet
and Networked Trade Platform (NTP) are comprehensive digital platforms that
enable electronic submission of trade documents, online payment systems, and real-
time tracking of goods. These initiatives have streamlined customs procedures,
reduced paperwork, and significantly expedited clearance times, enhancing
transparency and boosting Singapore's position as a global trade hub.
South Korea is another Asian country that has successfully implemented
digital transformation in trade facilitation. The country's Automated Customs
Clearance System (ACCS) allows traders to submit electronic customs declarations
and documents, automating customs procedures and improving data accuracy.
South Korea has also embraced electronic payment systems and advanced risk
management tools, harnessing the power of digital technologies to enhance trade
efficiency and security.
China, with its vast trade volume, has also undergone a remarkable digital
transformation in trade facilitation. The country's National Single Window (NSW)
integrates trade-related procedures, providing a centralized platform for electronic
submission of documents and data. China's digital initiatives have resulted in
improved customs clearance efficiency, reduced trade costs, and enhanced
transparency. The establishment of Cross-border e-Commerce Comprehensive Pilot
Zones has further facilitated the digitalization of cross-border trade, enabling
seamless transactions and promoting the growth of e-commerce.
In the United Arab Emirates (UAE), digital transformation has played a
crucial role in trade facilitation. The UAE's Dubai Trade portal offers a range of
digital services, including electronic customs declarations, online payment systems,
and digital trade platforms. The country has also implemented advanced risk
management systems to ensure secure and efficient trade transactions. These digital
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initiatives have enhanced the UAE's competitiveness as a global trade and logistics
hub, attracting businesses and promoting economic growth.
Similarly, Malaysia has embraced digital transformation to streamline trade
processes and enhance efficiency. The implementation of the National Single
Window (NSW) system allows traders to submit electronic customs declarations
and documents, simplifying procedures and reducing paperwork. Malaysia has also
adopted electronic payment systems, electronic certificates of origin, and digital
trade platforms, promoting transparency and facilitating seamless trade
transactions.
The experiences of these Asian countries demonstrate the transformative
power of digitalization in trade facilitation. By leveraging digital technologies,
these nations have significantly improved trade efficiency, reduced administrative
burdens, and enhanced transparency in cross-border transactions. Their success
stories serve as valuable models for other countries looking to leverage digital
transformation for trade facilitation and economic growth.
CHAPTER 2: SITUATION OF DIGITAL TRANSFORMATION ON
TRADE FACILITATION IN VIET NAM
2.1. An overview of trade facilitation in Viet Nam before digital
transformation
At the APEC Economic Leaders' Meeting in Busan in 2005, Viet Nam
promised to implement trade facilitation measures in response to the APEC leaders'
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proposal for a 5% reduction in trade transaction costs by 2006 and a further 5%
reduction by 2010. Trade facilitation is a key component of Viet Nam's Socio-
Economic Development Strategy, 2011-2020, which aimed to improve the country's
business environment in order to maintain trade development and double GDP per
capita by 2020 compared to 2011. The strategy was translated into a number of
legislative instruments, including government decrees and ministerial directives
aimed at improving the business environment and national competitiveness, as well
as measures aimed at promoting Vietnamese enterprises. These legislative papers
continue to be among the most prominent legal foundations regulating the trade
facilitation process in Viet Nam.
On 4 October 2016, The National Steering Committee on the ASEAN Single
Window, the National Single Window, and Trade Facilitation (NATF) was
established by an order from the Prime Minister. In compliance with the WTO TFA,
the NATF serves as the National Trade Facilitation Committee of Viet Nam.
Following this decision, the General Department of Viet Nam Customs, also known
as Viet Nam Customs, was given the responsibility of serving as the coordinator for
the implementation of the trade facilitation initiatives.
The government agencies worked with the Ministry of Finance to implement
the WTO TFA’s commitments include the Ministry of Industry and Trade (MOIC);
the Ministry of Transport; the Ministry of Science and Technology; the Ministry of
Information and Communications; the Ministry of Health; the Ministry of
Agriculture and Rural Development (MARD); the Ministry of Natural Resources
and Environment; the Ministry of National Defence; the Ministry of Culture, Sports
and Tourism; and Viet Nam Chamber of Commerce and Industry (VCCI). On 13
October 2016, the Prime Minister of Vietnam signed an order enabling a plan for
the preparation and execution of the WTO TFA, including a specific framework to
direct and oversee the trade facilitation process at all administrative levels, from
central to local government agencies. Vietnam developed a timetable to execute
trade facilitation measures, which are divided into categories A, B, and C in
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accordance with WTO TFA requirements, and submitted it to the WTO on October
15, 2014.
Between 2018 and 2020, trade facilitation performance significantly
improved in several areas, particularly in the accessibility of information, advance
rulings, fees, and charges, automation of customs procedures and documents, and
simplification of customs operations.
The World Bank's Doing Business in 2018 report, which reveals that Viet
Nam's overall ranking in the Doing Business Index in 2018 increased by 14 spots
from 82 to 68 out of 190 economies, reaffirmed the evaluation (World Bank, 2018b:
2). An important step forward in streamlining customs procedures and increasing
investment in the logistics structure to improve connectivity was made by Viet
Nam, as evidenced by the World Bank's Logistics Performance Index (LPI) survey,
which placed the country 39th globally in 2018 from 64th in 2016 (World Bank,
2018a: 1). Trade income climbed 12% to approximately $480 billion in 2018 thanks
to the government's ongoing efforts and sustained commitment to adopting trade
facilitation measures.
Despite impressive advances in trade facilitation, remaining problems pose
a threat to the sustainability of such gains. The importation of commodities is
governed by about 300 legality documents published and maintained by line
ministries or government organizations. Complying with complex trade regulations
requires substantial resources and time. In 2017, around 57.5% of items were
classified to the green lane, where customs scrutiny is mostly waived, 37.4% of
imported goods were subject to stricter inspection in the yellow lane, and 5.1% of
imported goods were submitted to physical examination in the red lane. The figures
are greater than those of ASEAN neighboring countries with comparable levels of
economic growth. In 2018, Viet Nam surpassed Malaysia in the customs LPI rating
and was the top-performing lower middle-income country in the LPI. This
significant improvement in trade facilitation coincided with a significant increase
in FDI inflows and a dramatic increase in exports and imports.
34
A VCCI survey on the evaluation of Vietnamese companies' satisfaction with
customs procedures in 2017 (Thoi bao tai chinh Viet Nam Online, 2017) revealed
that 46% of traders had trouble following customs regulations and 23% were
dissatisfied with the coordination between customs and the appropriate agencies,
which led to delays in customs clearance. Similarly, only 20% of traders were
entirely satisfied with customs agencies' expertise and proficiency. Many traders
expressed dissatisfaction with the overly ambiguous and opaque administrative
formalities and procedures. Furthermore, limited infrastructural capacity and a lack
of effective logistics and transportation are impeding commodity mobility. The
government must exert considerable effort to ensure that trade facilitation measures
benefit both traders and the economy as a whole.
Figure 1. Trade Facilitation Performance in Viet Nam (2022)
In terms of information accessibility, appeals processes, fees and charges,
streamlining of processes, and internal border agency cooperation, Viet Nam comes
the closest to exhibiting the best performance across the sample. Since 2019,
performance has increased in the following areas: accessibility of information,
simplification of processes, cooperation between internal and external border
agencies, governance, and impartiality.
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For lower middle-income countries like Viet Nam, the assessment of trade
facilitation measures has identified key areas where reforms can have the greatest
positive impact on bilateral trade flows and trade costs. These areas include
formalities, governance and impartiality, information availability, involvement of
the trade community, advance rulings, and appeal procedures. To further enhance
trade facilitation, Viet Nam would benefit from ongoing improvements in the
following areas:
 Advance rulings: Improving the availability of information on
advance rulings and considering increasing the validity period of
advance rulings.
 Fees and charges: Reducing the number and diversity of fees and
charges collected, as well as lowering the fees charged for services
during normal working hours.
 Formalities - documents: Expanding the acceptance of copies of
documents, reducing the number of trade-related documents, and
minimizing the time required to prepare such documents.
 Formalities - automation: Promoting the availability of full-time
automated processing for Customs, improving the quality of
telecommunications and IT infrastructure supporting border process
automation.
 Formalities - procedures: Further reducing the percentage of physical
inspections, expanding the possibility of goods being released prior to
final determination and payment of Customs duties for all types of
goods, increasing the coverage of Authorized Operator programs,
supporting risk management systems for controls by other border
agencies, simplifying procedures in terms of time and costs, and fully
aligning Customs working hours with commercial needs.
36
Implementing improvements in these areas will contribute to the overall
enhancement of trade facilitation in Viet Nam, leading to increased trade flows and
reduced trade costs.
2.2. Current situation of digital transformation in Viet Nam
2.1.1. Relative legal principles of digital transformation in Viet Nam
Digital government aids in improving government performance in all areas -
efficiency, effectiveness, transparency, and reduced corruption. With the support of
the digital economy, we can break free from the middle-income trap by fostering
innovation, creating new values, improving labor productivity, and developing new
economic engines. The development gap is closed and inequality is decreased
because of the digital society, which also provides equitable access to services,
education, and knowledge. Businesses and fields are intelligently and optimally
optimized to improve people's experiences and quality of life.
Recognizing the meaning and importance of digital transformation, our Party
and State have set out guidelines and issued many policies to strongly promote
national digital transformation, and develop the digital economy and digital society
to create a breakthrough in improving labor productivity and the economy's quality,
efficiency, and competitiveness. Specifically, Decision No. 749/QD-TTg (June 3,
2020) of the Prime Minister approving the "National digital transformation program
to 2025, orientation to 2030” identified digital transformation in Viet Nam as three
pillars: digital government; digital economy; digital society.
The Ministry of Home Affairs has issued many documents, such as Decision
No. 151/QĐ-BNV (February 25, 2021), by the Minister of Home Affairs approving
the Digital Transformation Plan of the Ministry of Home Affairs from 2021 to 2025,
with an orientation to 2030; Decision No. 1198/QD-BNV (November 18, 2021) of
the Minister of Home Affairs approving the Digital Transformation Project of the
Ministry of Home Affairs from 2021 to 2025 and orientation to 2030. The
transformation task is clearly outlined in the scheme. The digital transformation
model, goals, and solutions of the Ministry of Home Affairs must be clarified,
37
including general solutions, solutions to build a digital government, digital
transformation in the Ministry of Home Affairs' fields, and so on.
The Party Personnel Committee of the Ministry of Home Affairs declared in
Resolution No. 21-NQ/BCSĐ (July 28, 2022) on digital transformation to 2025,
orientation to 2030: “Digital transformation of the Ministry of Home Affairs has
been implemented based on the Party's resolutions and principles on building the
political system, renewing the leadership method, and enhancing the leadership role
of the Party, Party committees at all levels and agencies and units under and directly
under the Party. The Ministry of Finance is fully aware of the content, requirements,
and importance of digital transformation, considering digital transformation as a
key task to improve the quality and performance of each agency and unit. Clearly
define the responsibilities of collectives and heads of agencies and units under and
under the Ministry to promote the digital transformation of the Ministry of Home
Affairs…”.
Besides, Resolution No. 21-NQ/BCSĐ also stated: “Transforming the
Ministry of Home Affairs' activities in the digital environment. The direction,
administration, inspection, supervision, and professional activities of the Ministry
of Home Affairs are carried out using data and digital technology, increasing
management effectiveness and efficiency; meet the requirements of implementing
the National Digital Transformation Program to 2025, with a vision to 2030 in line
with the practical conditions of the Ministry of Home Affairs to develop e-
Government toward the Ministry of Digital generate easily accessible and usable
open data, accelerate work processing, encourage the usage and storage of digital
documents, cut operating expenses and time, and eventually construct a modern and
economical working environment".
As a result, it is necessary to develop applications and services for the
common use of digital infrastructure and digital platforms; use intelligent analysis
tools to assist Ministry leaders in making timely and accurate decisions in state
management in the field of Home Affairs; and provide digital services to help
people easily access and use.
38
Also, the Ministry of Finance of Viet Nam has issued various resolutions,
plans, and action programs to address the aforementioned challenges. For instance,
Resolution No. 02-NQ/BCSĐ (March 9, 2018) issued by the Party Committee of
the Ministry of Finance, focuses on the application of technology in the financial
and budgetary sectors as part of the Fourth Industrial Revolution. The Ministry of
Finance also issued an Action Plan accompanying Decision No. 1874/QD-BTC
(November 27, 2020) to implement the Prime Minister's Decision No. 749/QD-TTg
(June 3, 2020) approving the National Digital Transformation Program until 2025
with a vision towards 2030. Furthermore, on October 25, 2021, the Ministry of
Finance released Decision No. 2042/QD-BTC, approving the Plan for the
application of information technology in the ministry's activities, the development
of e-Government, and ensuring cybersecurity during the period 2021-2025. This
decision emphasizes the implementation of digital transformation and the
application of technologies from the Fourth Industrial Revolution in the state
management of the financial sector, including customs.
These resolutions, plans, and action programs demonstrate the Ministry of
Finance's commitment to driving digital transformation and technology adoption in
the financial sector, including customs. They provide a strategic framework and
guidelines for integrating digital technologies, enhancing information management,
and ensuring the security of networked information systems. Through these
initiatives, the Ministry of Finance aims to improve trade facilitation, streamline
administrative procedures, promote transparency, and enhance the efficiency of
customs operations in Viet Nam. By leveraging the potential of the Fourth Industrial
Revolution, the Ministry of Finance seeks to optimize its functions and provide
better services to businesses, contributing to the overall development and
competitiveness of Viet Nam's economy.
2.1.2. Viet Nam’s current state of digital transformation
In Viet Nam, digital transformation was still a significant "barrier" a few
years ago. Up to 30.7% of enterprises claimed to have heard of it but were unsure
on what to do, and 38% expressed conversion-related uncertainty. According to a
39
2019 survey by the Viet Nam Software and IT Services Association Vinasa, many
people are unsure of where digital should begin or do not comprehend how
computerization differs from digital transformation. To date, however, businesses
have a clear understanding of the value of digital transformation, and they are more
driven than ever to put it into practice.
However, businesses have numerous challenges when starting their actual
implementation, particularly small and medium-sized businesses. These firms are
now dealing with issues like: a lack of digital skills and human resources (17%), a
lack of IT platforms robust enough to support digital transformation (16%), a lack
of digital thinking or digital culture issues in the company (15.7%),...
The Government of Viet Nam has continuously established digital
transformation programs for enterprises to address the aforementioned issues and
advance the growth of Viet Nam's digital transformation. The "National Digital
Transformation Program up to 2025, with a vision to 2030" has established targets
for the development of the digital economy and a strategy for Viet Nam to join the
group of 50 leading nations by 2025 about information technology.
According to a VCCI survey of more than 400 companies of all sizes,
Vietnamese companies have started to recognize and use digital technology in areas
including internal administration, sales, marketing, logistics, production, and
payment after the pandemic. Up to 98% of businesses anticipate significant changes
in production and business operations as a result of implementing digital
transformation, with cost-cutting potential accounting for more than 71% of those
changes. Other major changes include a reduction in paperwork for businesses
(61.4%), an increase in product and service quality (45.3%), and the ability to
increase productivity.
Digital Transformation takes place in several sectors:
Several industries and fields need to prioritize digital transformation first, in
which, focusing on the implementation of initiatives to link industries and fields to
provide a new and completely different experience, bringing value to customers.
value for people, businesses, and society.
40
Digital transformation in the medical field
Develop a framework to support remote medical examination and treatment
in order to assist minimize the load on medical facilities, restrict crowded contact,
and reduce the danger of cross-infection. 100% of medical facilities have remote
medical examination and treatment departments; encouraging the health sector's
digital transformation.
Building and gradually forming a health care and disease prevention system
based on digital technologies; broadly applying digital technology at medical
examination and treatment facilities, contributing to administrative reform,
reducing hospital workload, improving medical examination and treatment quality,
and using electronic medical records to move away from using patients. Paper
initiatives, hospital fees, and the formation of smart hospitals; the development of
a smart health management platform based on digital technology, the integration of
information and data, and the formation of a national health database.
Piloting the implementation of the initiative "Each citizen has a personal
doctor" with the goal of providing each citizen with a digital record of personal
health; on that basis, the doctor advises and cares for each citizen as follows: is a
personal doctor, forming a complete digital health care system from primary health
care, prevention, and treatment.
Create a legal corridor to facilitate telemedicine and electronic prescriptions
for people, to ensure that people can contact doctors quickly and efficiently,
reducing costs and patient transportation time.
Digital transformation in the field of education
Developing a support platform for distance learning and teaching, thoroughly
applying digital technology in management, teaching, and learning; digitizing
documents and textbooks; building a platform to share teaching and learning
resources in both face-to-face and online forms. Developing technology for
education, towards personalized training.
41
100% of educational institutions implement distance learning and teaching,
in which pilot training programs allow students to study online at least 20% of the
program's content. Use digital technology to assign homework and check students'
preparation before class.
Digital transformation in the field of finance - banking
Build e-finance and establish a modern and sustainable digital financial
foundation. Implement comprehensive application of digital technology in tax,
customs, treasury, and securities industries.
Digital transformation in commercial banks to provide digital banking
services in the direction of diversifying distribution channels, innovating,
automating processes, and promoting cooperation with financial technology
companies. Fintech and payment intermediaries in building a banking-financial
service ecosystem to promote national financial universalization, bringing
financial-banking services closer to people in remote areas. remote areas have not
been able to access or have not been served by banks based on technological
innovations such as mobile payment, and peer-to-peer lending.
Support loan accessibility with credit scoring solutions with a reliable
customer database and scoring model.
Digital transformation in agriculture
To develop hi-tech agriculture in the direction of focusing on smart
agriculture and precision agriculture, increasing the proportion of digital agriculture
in the economy.
Data must be the foundation for agricultural digital transformation. Build
large data solutions for the land, farming, cattle, and fishing industries. establishing
a ground- and airborne observation and monitoring network for agricultural
activities. Encourage the sharing of agricultural equipment through digital
platforms and the dissemination of information to farmers about the environment,
the weather, and the quality of the soil in order to increase production and crop
quality.
42
Implementing digital technology to automate production and commercial
processes; managing and monitoring product origin and supply chain to ensure
speedy, transparent, accurate, safe, and food hygiene. To ensure that every farmer
is informed and trained in the use of digital technology in the future, think of
launching the program "Each farmer is a trader, each cooperative is an enterprise
applying digital technology". create, supply, distribute, predict (price, season, etc.)
the availability of agricultural products, and encourage the growth of e-commerce
in the agricultural sector.
Implement strong digital transformation in management to have timely
policies and administration of agricultural development such as forecasting, market
warning, and planning management.
Digital transformation in the field of transportation and logistics
Develop intelligent traffic systems with an emphasis on national, state, and
urban highways. Transformation of logistics infrastructures (including ports on the
sea, inland waterways, airports, railroads, and logistics).
Develop platforms that connect shippers, carriers, and customers to create a
one-stop system that will allow shippers to accurately determine the best method
for transporting their goods and warehouses, as well as receive assistance with
packaging and registration, completing the processing of related administrative
documents.
Transforming traffic infrastructure management, transportation business
management, vehicle driver management, enabling digital traffic infrastructure
management, vehicle registration and management through digital records, and
issuing and managing digital vehicle driver licenses.
Digital transformation in the energy sector
Digital change in the energy sector, with a focus on optimizing and
automating networks to ensure efficient electricity delivery.
43
Connect digital meters to enhance speed and billing accuracy, uncover
network faults sooner, assist users in energy conservation, and detect electrical
power outages.
Digital transformation in the field of natural resources and environment
Building comprehensive information systems and large databases for
effective management of natural resources and environment, such as National land
database; databases on other fields (national geography; natural resources and
environment monitoring; biodiversity; waste sources; remote sensing; seas and
islands; climate change; meteorology - hydrology; geology - minerals;...); building
an open national digital map as a foundation for the development of digital services
for socio-economic development; deploying smart solutions in monitoring,
monitoring, management, handling environmental incidents, early warning of
natural disasters.
Digital transformation in the field of industrial production
Digital transformation in the field of industrial production in the direction of
focusing on developing the following pillars: building smart strategies and
organizational structures, building smart factories, intelligently operating, and
creating smart products. intelligence, building data services and developing digital
skills for employees.
2.1.3. Viet Nam’s level of digital transformation adaptation:
Viet Nam is currently undergoing a significant level of digital
transformation, which can be characterized as being in the transition between Level
2 and Level 3 of the digital transformation framework.
At Level 2, Viet Nam has made notable progress in implementing digital
technologies within specific functions or departments. Various sectors, including e-
commerce, finance, and telecommunications, have witnessed significant digital
advancements. The adoption of digital tools and automation has improved
operational efficiency and customer experiences in these sectors. Additionally, the
44
government has initiated digital transformation efforts, focusing on areas such as e-
government services and digital infrastructure development.
As Viet Nam moves towards Level 3, the country is aiming to integrate
digital technologies into core business processes across different sectors and
industries. The government has emphasized the importance of digitalization in
multiple aspects, including finance, education, healthcare, and transportation.
Efforts are being made to promote data sharing, improve connectivity, and enhance
digital skills and literacy among the population. The objective is to achieve a more
comprehensive and organization-wide digital transformation, where digital
technologies become deeply embedded in business operations and decision-making
processes.
Viet Nam's commitment to digital transformation is evident through
initiatives like the National Digital Transformation Program, which seeks to create
a comprehensive digital ecosystem and leverage digital technologies for economic
growth and competitiveness. The government's focus on promoting e-commerce,
developing digital infrastructure, and enhancing cybersecurity measures also aligns
with the goals of Level 3 transformation.
It is worth noting that Viet Nam's level of digital transformation may vary
across different sectors and regions within the country. While certain industries,
such as e-commerce and fintech, have experienced significant digital
advancements, there is still room for progress in other sectors. Challenges related
to infrastructure development, digital skills gap, and regulatory frameworks may
impact the pace and extent of digital transformation in Viet Nam.
So to be clarify, Viet Nam is currently in the transition phase between Level
2 and Level 3 of digital transformation. The country has made significant strides in
implementing digital technologies within specific functions and sectors, and efforts
are being made to integrate these technologies into core business processes across
various industries. With the government's commitment and ongoing initiatives, Viet
Nam is poised to further advance its digital transformation journey and capitalize on the
opportunities presented by the digital age.
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM
sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON  TRADE FACILITATION IN VIET NAM

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sưu tầm ASSESSMENT OF DIGITAL TRANSFORMATION ON TRADE FACILITATION IN VIET NAM

  • 1. TABLE OF CONTENTS STАTEMENT OF ORIGINАL АUTHORSHIP.................................................... i АCKNOWLEDGMENTS ..................................................................................... ii TАBLE OF CONTENTS...................................................................................... iii LIST OF АBBREVIАTIONS................................................................................ v LIST OF TАBLES................................................................................................ vi LIST OF FIGURES ............................................................................................. vii АBSTRАCT.......................................................................................................... ix INTRODUCTION ................................................................................................. 1 CHAPTER 1: OVERVIEW OF DIGITAL TRANSFORMATION ..................... 7 CHAPTER 2: SITUATION OF IMPLEMENTING WTO TFA IN VIET NAM BEFORE “NATIONAL DIGITAL TRANSFORMATION PROGRAM” ......... 21 CHAPTER 3: SITUATION OF DIGITAL TRANSFORMATION ON TRADE FACILITATION IN VIET NAM ......................................................................... 30 CHAPTER 4: GLOBAL TRENDING ON DIGITAL TRANSFORMATION IN TRADE FACILITATION AND RECOMMENDATION TO VIET NAM ......... 52 CONCLUSION …................................................................................................ 67 REFRENCES ..…................................................................................................. 69 MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS ASSESSMENT OF DIGITAL TRANSFORMATION ON TRADE FACILITATION IN VIET NAM Specialization: International Trade Policy and Law FULL NAME: LÊ ĐỨC BÌNH Hanoi – 2023
  • 2. ii TABLE OF CONTENTS STАTEMENT OF ORIGINАL АUTHORSHIP.................................................... i АCKNOWLEDGMENTS ..................................................................................... ii TАBLE OF CONTENTS...................................................................................... iii LIST OF АBBREVIАTIONS................................................................................ v LIST OF TАBLES....................................................................................... MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS ASSESSMENT OF DIGITAL TRANSFORMATION ON TRADE FACILITATION IN VIET NAM Major: International Economics Specialization: International Trade Policy and Law Code: 8310106 FULL NAME: LÊ ĐỨC BÌNH Supervisor: Assoc. Prof. Dr. TRINH Thi Thu Huong Hanoi – 2023
  • 3. ii STATEMENT OF ORIGINAL AUTHORSHIP I thus certify that this thesis is my original work, completed with the utmost commitment, effort, and hard labor during the time allotted, and that no information was obtained from an unauthorized data source. The research contents on this topic are fully honest and have not been exploited or publicized in any way. I guarantee that the master thesis was completed in accordance with the Foreign Trade University's thesis writing regulation and methodology. STUDENT: Le Duc Binh
  • 4. iii ACKNOWLEDGEMENT The process of writing this thesis involves ongoing learning and research, which results in not only the solutions offered in Chapter 3 of the thesis but also a variety of experiences and information for the author. The author got recommendations, contributions, and significant assistance in completing this thesis. First, it is the author's honor and good fortune to be guided by Assoc. Prof. Dr. TRINH Thi Thu Huong, my supervisor at Foreign Trade University, has extensive knowledge and experience in the disciplines of law and conflict resolution, for which I am grateful. I could not have finished this thesis without her advice and recommendations. Second, I would like to express my gratitude to the authors of the books and publications cited in this thesis. My final thanks go to the Faculty of Graduate Studies at Foreign Trade University for providing us - the postgraduate students - with useful master courses and assistance throughout the learning and thesis writing process. Hanoi, July 7th , 2023 Le Duc Binh
  • 5. TABLE OF CONTENTS STATEMENT OF ORIGINAL AUTHORSHIP .................................................. ii ACKNOWLEDGEMENT...................................................................................... iii TABLE OF CONTENTS.......................................................................................... i LIST OF АBBREVIАTIONS................................................................................ iii LIST OF TABLES.................................................................................................. iv LIST OF FIGURES................................................................................................ iv ABSTRACT...............................................................................................................v INTRODUCTION ....................................................................................................1 1. Importance of the study ...............................................................................1 2. Literature review ..........................................................................................2 3. Research questions and scope .....................................................................6 4. Objectives ......................................................................................................7 5. Research methodology .................................................................................7 6. Structure of the thesis ..................................................................................8 CHAPTER 1: OVERVIEW OF DIGITAL TRANSFORMATION & TRADE FACILITATION.......................................................................................................8 1.1. Overview of Digital Transformation ......................................................8 1.1.1. Understanding Digital Transformation ...........................................8 1.1.2. Digital Transformation strategy .....................................................10 1.1.3. Levels of digital transformation adaptation: .................................12 1.1.4. Digital transformation measures of success..................................13 1.1.5. Challenges and success factors of digital transformation............16 1.2. Overview of Trade Facilitation .............................................................17 1.2.1. Understanding Trade Facilitation..................................................17 1.2.2. The negotiation process of the WTO Trade Facilitation Agreement (TFA).............................................................................................18 1.2.3. Structure of WTO Trade Facilitation Agreement .........................20 1.2.4. Meaning of WTO Trade Facilitation Agreement..........................22 1.3. Digital transformation in Trade facilitation........................................24 1.3.1. The impact of digitalization on trade: ............................................24 1.3.2. Digital Transformation in Facilitating Trade ...............................25 1.4. Experiences from other countries for digital transformation in Trade Facilitation ...............................................................................................28 iii iii v vi vi vii
  • 6. ii 1.4.1. The trend of other countries implementing digital transformation in trade facilitation ..........................................................................................28 1.4.2. Experiences from some Asian countries........................................29 CHAPTER 2: SITUATION OF DIGITAL TRANSFORMATION ON TRADE FACILITATION IN VIET NAM ..........................................................31 2.1. An overview of trade facilitation in Viet Nam before digital transformation .................................................................................................31 2.1.1. Relative legal principles of digital transformation in Viet Nam ..36 2.1.2. Viet Nam’s current state of digital transformation .......................38 2.1.3. Viet Nam’s level of digital transformation adaptation: ................43 2.1.4. Vision and Goal of Digital Transformation in 2023 .....................45 2.2. The Situation of Digital Transformation in Viet Nam Trade Facilitation...........................................................................................................47 2.2.1. Achievement in digitalizing trade facilitation of Viet Nam ..........47 2.2.2. Advantages of Viet Nam in digital transformation of trade facilitation ........................................................................................................60 2.2.3. Limitations........................................................................................61 CHAPTER 3: RECOMMENDATIONS FOR VIET NAM IN DIGITAL TRANSFORMATION ON TRADE FACILITATION......................................64 3.1. Key tasks for Viet Nam government and Customs sector......................64 3.2. Recommendations: ......................................................................................66 3.2.1. About the digital system of Viet Nam Customs ...................................66 3.2.2. About the quality of human resources.................................................71 3.2.3. Recommend the financial solutions.....................................................73 3.2.4. Recommend the Organizational solutions...........................................74 CONCLUSION .......................................................................................................75 REFERENCES........................................................................................................78 iv
  • 7. iii LIST OF АBBREVIАTIONS TFA Trade Facilitation Agreements WTO World Trade Organization UNCTAD United Nations Conference on Trade and Development OECD Organisation for Economic Co-operation and Development GATT General Agreement on Tariffs and Trade NATF National Single Window and Trade Facilitation VCCI Viet Nam Chamber of Commerce and Industry WCO World Customs Organization VASSCM Viet Nam Automated System for Seaport Customs Management VDCA Viet Nam Digital Communications Association SDT Special and Differential Treatment GVCs Global Value Chains LPI Logistics Performance Index SMEs Small and medium-sized enterprises LDCs Developing and least-developed countries IoT Internet of Things KPI Key Performance Indicator ROI Return on Investment v
  • 8. iv LIST OF TABLES Table 1: Comparing TFA content with the GATT principles ............................ 17 Table 2. Index of international trade performance in 2020 ................................ 47 LIST OF FIGURES Figure 1. Trade Facilitation Performance in Viet Nam (2022) ............................. 24 Figure 2. Trading across Borders in Viet Nam – Time and Cost .......................... 48 Figure 3. Level of satisfaction of enterprises with methods of finding information about administrative procedures ............................................................................ 56 vi
  • 9. v ABSTRACT The thesis research conducted an assessment of the impact of digital transformation on trade facilitation in Viet Nam, especially about customs operation. The study aimed to understand the extent to which digital technologies have influenced and improved trade processes, efficiency, and competitiveness in the country. The research employed qualitative data collection methods. The data was gathered through research about trade facilitation with stakeholders including government officials, industry representatives, and logistics providers. The findings of the study revealed several significant outcomes. Firstly, it was evident that digital transformation has had a positive impact on trade facilitation in Viet Nam. The adoption of digital technologies, such as e-commerce platforms, digital payment systems, and online documentation processes, has streamlined trade procedures, reduced administrative burdens, and enhanced the overall efficiency of cross-border transactions. The research also highlighted the role of digital infrastructure in facilitating trade facilitation. The development of robust internet connectivity, widespread adoption of mobile devices, and the expansion of digital platforms have improved access to markets, enhanced communication, and fostered collaboration among businesses engaged in international trade. Furthermore, the study identified various challenges and barriers to digital transformation in trade facilitation. These included inadequate digital skills among stakeholders, fragmented data systems, cybersecurity concerns, and the need for regulatory reforms to accommodate the changing digital landscape. Addressing these challenges will be crucial to ensure the sustained benefits of digital transformation in trade facilitation. vii
  • 10. vi Based on the research findings, several recommendations were provided. It was suggested that the Vietnamese government should continue investing in digital infrastructure, promote digital literacy and skills development, and strengthen cybersecurity measures to foster a secure and enabling environment for digital trade. Collaboration among government agencies, businesses, and industry associations was also emphasized to ensure effective implementation and coordination of digital transformation initiatives. In conclusion, the assessment of digital transformation on trade facilitation, especially about customs operation in Viet Nam highlighted the positive impact of digital technologies on streamlining trade processes and enhancing competitiveness. However, challenges and barriers to digital transformation exist and require attention. By addressing these challenges and implementing the recommended strategies, Viet Nam can further leverage digital transformation to boost trade facilitation, contribute to economic growth, and strengthen its position in the global marketplace. viii
  • 11. 1 INTRODUCTION 1. Importance of the study Since Vietnam signed the Trade Facilitation Agreement (TFA) in 2015, trade facilitation has played an essential role in reducing the cost of trade, which has remained high despite the cost of transportation, the development of telecommunications and information technology, and countries that have cut many trade barriers. In today's global interactive economy, efforts to develop cooperation in trade procedures and promote liberalization of trade policies have promoted global trade and helped countries integrate into the production system. And in that process, digital transformation offers a solution by leveraging technology to streamline and modernize trade facilitation. The traditional method can be called a paper-based process, it is slow, inefficient, and causes a lot of errors which is the reason that caused the delay of the trade process. By digitizing documentation, automating processes, and implementing electronic platforms, trade facilitation can become faster, more transparent, and cost-effective. Digitalization also enhances collaboration and interoperability among stakeholders, facilitates risk management, and enables real- time tracking and monitoring of shipments. Additionally, in the modern world of e- commerce and global value chains, digital transformation is essential to improve the efficiency of cross-border trade. Researching the digital transformation of trade facilitation is crucial in today's globalized and technologically advanced world. As trade facilitation processes evolve and become increasingly digitalized, understanding the implications, challenges, and opportunities that arise from this transformation is important. Researching this area helps identify best practices, innovative solutions, and policy recommendations to optimize the benefits of digital trade facilitation. It enables governments, businesses, and stakeholders to stay informed about emerging technologies, such as blockchain, artificial intelligence, and data analytics, and their potential applications in streamlining and enhancing trade processes. Moreover, the
  • 12. 2 research sheds light on the digital divide, ensuring that the benefits of digital transformation are inclusive and accessible to all, especially for developing countries and small businesses. By investigating the digital transformation of trade facilitation, policymakers and practitioners can make informed decisions, devise effective strategies, and foster an enabling environment for seamless and efficient cross-border trade in the digital age. Also, digital transformation can impact the trade facilitate processes in Viet Nam, with digital technology, the government can harmonize the procedure system. The digital transformation has reduced the costs of engaging in international trade, facilitated the coordination of global value chains (GVCs), helped diffuse ideas and technologies, and connected a greater number of businesses and consumers globally. But even though it has never been easier to engage in international trade, the adoption of new business models has given rise to more complex international trade transactions and policy issues. The thesis aims to figure out the connection between digital transformation and trade facilitation, especially in customs operation. Comparing the differences of digital transformation on trade to other industries. In addition, by learning about the current status of trade facilitation with the impact of digital technology in our nation, the thesis also makes some recommendations on making the process more efficient and improving awareness and application. 2. Literature review Assessment of Digital transformation on trade facilitation is currently a topic of great interest to academics as well as the government. WTO members concluded negotiations at the 2013 Bali Ministerial Conference on the landmark Trade Facilitation Agreement (TFA), which entered into force on 22 February 2017 following its ratification by two-thirds of the WTO membership. The TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance
  • 13. 3 issues. It further contains provisions for technical assistance and capacity building in this area. The TFA entered into force on 22 February 2017 after two-thirds of the WTO members completed their domestic ratification process. In 2015, Prof. Ph.D. Trinh Thi Thu Huong and Dr. Phan Thi Thu Hien shows an overview of the TFA, the scope and topic of each article. This study gave a clear look at the World Trade Organization Trade Facilitation Agreement. Besides that, many authors in Vietnam have also conducted studies to give basic and general views and analyze the provision of TFA in Vietnam. For instance, in 2014, Lawyer Tran Huu Huynh, Former President of VIAC released “WTO Facilitation Agreement, What do businesses get? What needs to be done?” on Seminar Customs - business partnership in implementing the WTO Trade Facilitation Agreement. The article was aimed at finding the impact and what needs to be implemented to facilitate trade flow. In early 2016, Jan Hoffman of UNCTAD published a study on "Trade Facilitation and Development" which discussed the various relationships between human and institutional development on the one side, and a country's capacity to implement and benefit from the trade facilitation measures of the WTO Trade Facilitation Agreement (TFA) on the other. Some data of this thesis rely on the results of a survey by the Economic Institute for ASEAN and East Asia (ERIA) in 2011 of firms in each of the 10 AMS point to two trade facilitation measures as the top two concerns of the ASEAN private sector for implementation by 2015: (i) improve import and customs administration efficiency and integrity; and (ii) streamline and expedite import and customs procedures, documents, etc. (Intal, Narjoko, and Simorangkir, 2011: 45- 46). Also, the Doing Business Annual Report in the last 5 years and other documents by the World Bank bring a closer look as proof to review the impact of trade facilitation in trade in general and Vietnamese trade in specific.
  • 14. 4 The integration of modern digital technology into diverse sectors has emerged as a disruptive force around the world, influencing economies and industries. Digital transformation is especially important in the context of international trade because of its potential to redefine trade facilitation systems. This literature study provides a complete overview of the relevant research on assessing the influence of digital transformation on trade facilitation, with a particular focus on its implications for Vietnam. The analysis delves into the many facets of digital transformation, including its role in trade facilitation and the difficulties and opportunities it brings. Digital Transformation and Trade Facilitation: Digital transformation includes the strategic application of digital technologies such as artificial intelligence, big data, blockchain, and the Internet of Things to radically redesign organizational operations. Similarly, trade facilitation refers to the modernization, simplicity, and harmonization of cross-border trade procedures. Customs clearance, logistics, regulatory compliance, and information sharing are examples of these. The link between digital transformation and trade facilitation is found in the use of technology to streamline these operations, decrease costs, and improve efficiency. Trade facilitation benefits greatly from digital change. It increases efficiency by automating labor-intensive, manual operations, decreasing paperwork, and accelerating cross-border trade. Furthermore, digital technologies enable real-time data sharing among stakeholders, which improves transparency, lowers the risk of fraudulent activity, and reduces corruption. The decrease in trade costs, including administrative hurdles, transportation costs, and trade-related delays, is a fundamental effect of these developments, ultimately contributing to increased competitiveness for enterprises participating in international trade. Digital Transformation Initiatives in Vietnam:
  • 15. 5 Vietnam has actively pursued e-government initiatives aimed at digitizing governmental functions and enhancing public service delivery. These initiatives, including the implementation of the National Single Window (NSW) system, have direct implications for trade facilitation. The NSW system has streamlined customs processes by enabling electronic submission of trade-related documents, leading to reduced clearance times and costs for businesses engaged in international trade. Challenges and Considerations: While the advantages of digital transformation in trade facilitation are evident, several challenges and considerations demand attention. The digital divide, characterized by disparities in access to and proficiency with digital technologies, can exacerbate inequalities, particularly among small and medium-sized enterprises (SMEs) in Vietnam. Cybersecurity and data privacy concerns must also be addressed as digital trade processes expand, underscoring the importance of robust protection measures and appropriate regulations. A supportive regulatory framework is crucial to ensure the secure and effective deployment of digital technologies within trade facilitation processes. In the context of Vietnam's evolving trade landscape, the assessment of digital transformation's impact on trade facilitation is a critical area of research. While some studies have explored this intersection, there remains a notable research gap that warrants investigation. Specifically, there appears to be a dearth of research focusing on specific industries or sectors within the country, potentially overlooking key disparities and opportunities. Additionally, the regulatory and policy frameworks governing digital transformation in the context of trade facilitation in Vietnam have not been thoroughly analyzed. By addressing these gaps in the literature, this thesis aims to contribute to a more holistic understanding of how digital transformation is shaping trade facilitation in Vietnam, with implications for policy formulation and industry strategies. At the end of this paper, it is expected to give an overview of the applying status of digital transformation during TFA and their relationship in the last 7 years
  • 16. 6 since Vietnam signed the Trade Facilitation Agreement. In addition, the content of the study also presents the situation of applying digital transformation to trade facilitation in Vietnam: presenting the process and related regulations. In the context of Vietnam joining the generational Free Trade Agreements (FTAs), our country needs to apply digital methods to enhance the effectiveness of TFA. Therefore, more analysis and evaluation studies are needed to make recommendations on this issue. 3. Research questions and scope The thesis raises the following questions: How facilitating trade was processed in Vietnam, especially about customs operations? How digital transformation was applied in facilitating trade? What advantages or disadvantages does Vietnam have when implementing TFA, and also when applying digital transformation in trade facilitation? What solutions are needed to ensure that Vietnam will implement these digital technologies in facilitating trade well? To answer the above questions, the tasks of this study are to: - Research theoretical issues on trade facilitation, and digital transformation. - Learn about the provision of WTO’s Trade Facilitation Agreement and the provision of Vietnamese government on international. - Analyzing the current status of digital transformation, trade facilitation on its own, and trade facilitation with the support of digital technology in general and the Custom operation of Vietnam in particular, including accessing the compatibility between Vietnam domestic laws and regulations. From that, the thesis mentions recommendations that help enhance technology skills and adaptations in the Fourth Industrial Revolution, besides that, raising awareness about digital transformation. The scope of the content of this thesis contains the practical issues of trade facilitation and digital transformation, explains their relationship, and how they
  • 17. 7 impact each other, especially in the Customs sector (General Department of Viet Nam Customs). It also includes the regulations related to this topic. The thesis's time scope is from when Vietnam signed the Trade Facilitation Agreement in 2015 until now. The study's recommendation can be applied from now until there is a regulation directly adjusting the process of digital transformation applied to trade facilitation. 4. Objectives The thesis aims to comprehensively evaluate the impact of digital technologies on trade facilitation in the country. It seeks to analyze how the adoption and integration of digital tools and platforms have influenced trade processes, efficiency, and competitiveness. The thesis aims to examine the role of digital transformation in enhancing market access and global connectivity, assessing the cost implications, analyzing the impact on transparency and trust, and identifying challenges and barriers to successful implementation. By achieving these objectives, the thesis aims to provide valuable insights and recommendations for maximizing the benefits of digital transformation in trade facilitation, thus contributing to the overall understanding and advancement of digitalization in the Vietnamese trade sector. 5. Research methodology During the research process of this thesis, the author has applied the Secondary data analysis method. This method also known as archival study, is studying and assessing research that already exists, this the thesis will collect legal documents, and economic information through historical research methods and then classify and systematize them. Utilizing a diverse range of existing data sources, including trade statistics from Vietnam Customs, government reports, international organization data, and academic research, this approach seeks to explore and elucidate the multifaceted dynamics of digitalization within the context of trade facilitation. By systematically
  • 18. 8 defining research questions, retrieving and preparing relevant datasets, applying rigorous analytical techniques, and validating findings against existing literature and reports, this research aims to provide empirical evidence and insights into the transformative effects of digital technologies on the trade landscape in Vietnam. Furthermore, ethical considerations pertaining to data privacy and citation integrity will be meticulously adhered to throughout the secondary data analysis process. Through this methodological approach, this study aspires to contribute valuable insights and inform policy recommendations, thereby advancing knowledge in the field of digital transformation and trade facilitation. Besides that, the thesis will observe the real situation of implementing TFA and applying digital technology to trade facilitation of the Vietnamese Government and based on particular experiences from Vietnam, give recommendations for Vietnam by professional solution method. This methodological option provides a unique lens through which to explore the issue, carefully examining important venues, processes, and parties involved in trade facilitation, such as customs offices, logistics hubs, and government agencies. 6. Structure of the thesis The thesis included the following four chapters: Chapter 1: Overview of Digital Transformation & Trade Facilitation Chapter 2: Situation of applying digital transformation to trade facilitation in Viet Nam Chapter 3: Recommendations for Viet Nam in Digital Transformation on Trade Facilitation. CHAPTER 1: OVERVIEW OF DIGITAL TRANSFORMATION & TRADE FACILITATION 1.1. Overview of Digital Transformation 1.1.1. Understanding Digital Transformation
  • 19. 9 Digital Transformation is a wide-known term lately, and it has become a strategic imperative on leadership agendas. Digital transformation is the process of total and comprehensive change of individuals and organizations in the way of living, working and production methods based on digital technologies. It is the process that an organization applies to integrate digital technology in all types of areas, fundamentally changing how it delivers value to people; and make cultural and operational shifts that adapt better to changing people's demands. According to The International Business Machines Corporation (IBM), digital transformation approaches all parts of an organization, from its business models to customer experiences to procedures and operations, with a customer- driven, digital-first mindset. It leverages data to enable intelligent workflows, faster and smarter decision-making, and real-time response to market disruptions using AI, automation, hybrid cloud, and other digital technologies. Finally, it alters client expectations and opens up new business prospects. Its goal is to build a technical and operational foundation, to evolve and respond in the best possible way to unpredictable and ever-changing customer expectations, market conditions, and local or global events. The framework of digital transformation Any system for general and government systems for specific going through a digital transition should have a change management strategy, which is what a digital transformation framework is. A framework is a tool that supports transformation at all organizational levels and within individual departments. A framework supports digital transformation by outlining best practices and processes to do the following (IBM):  Analyze the impact of change across all areas of the organizations  Manage the change effectively and efficiently  Plan the steps to implement the transformation
  • 20. 10  Identify metrics to measure the benefits the change brings  Clarify ways to progress along your digital transformation journey 1.1.2. Digital Transformation strategy According to Amazon Web Services, which is the world's most comprehensive and broadly adopted cloud, they offer over 200 fully featured services from data centers globally, AWS offers many different tools and solutions for enterprises and software developers that can be used in data centers in up to 190 countries for government agencies, education institutions, non-profits and private organizations, digital transformation strategy is a comprehensive plan for accomplishing both short- and long-term digital transformation in any organization. It takes the following factors into account: • Leaders who initiate and drive the transformation • Investment and financial planning • Key performance indicators (KPIs) to measure the return on investment (ROI) • Tools and processes that will support the transformation • External resources and third-party experts • The impact of transformation on people The four steps to building successful digital transformation plans are outlined below: Align your digital transformation with your company objectives: Digital transformation project planning should be centered on your organization's overall goals rather than a specific technology. Your major emphasis
  • 21. 11 areas will also assist in determining KPIs, keeping the transformation measurable, and reducing the time to value. Create a proof of concept The most effective initial projects can produce measurable results in less than six months. It is preferable to create first initiatives that show ROI and gain support from the leadership. These early prototypes can then be modified and spread throughout the organization. An approach for implementing technology You can utilize a variety of methods in digital transformation to change your organization. Here are a few of these technologies: • Mobile technologies, like customer-facing applications and internal applications that improve productivity • Internet of Things, like smart sensors and intelligent devices that automatically connect to the internet and collect data • Cloud technologies, especially cloud computing and cloud storage • Artificial intelligence and machine learning for data analytics and decision- making • Augmented and virtual reality for immersive customer engagement • Robotics for operational efficiency By implementing these technologies, you may see a significant change in how customers and workers engage with your organization. To train your employees and improve the capabilities of your company, you might also need to enlist the aid of other partners and specialists. Collect feedback and improve the digital transformation approach
  • 22. 12 It is critical to include strong feedback loops in your digital transformation project planning. By gathering regular input from stakeholders, you can ensure that everyone learns from the experience and grows dynamically. Because digital transformation is a journey, including milestones in your timeline allows you to be flexible and make changes as needed. 1.1.3. Levels of digital transformation adaptation: Digital transformation can be conceptualized as a multi-level process, characterized by varying degrees of integration and maturity within organizations. These levels of digital transformation provide a framework for understanding the evolution and progression of digital initiatives. At the initial stage (Level 1), organizations are in the early phases of digital transformation, with limited implementation and exploration of digital technologies. Digital initiatives are often ad-hoc and lack a strategic, organization-wide approach. Moving to Level 2, organizations enter the functional stage, where digital technologies are selectively implemented within specific departments or functions. The focus is on improving specific areas such as marketing, sales, or customer service. This stage marks a transition from isolated digital initiatives to more structured and targeted efforts. However, the transformation is still limited in scope and lacks integration across the entire organization. As organizations advance to Level 3, digital transformation progresses towards business process integration. At this stage, organizations embrace end-to- end automation and digitization of core business processes. Digital technologies are integrated into workflows, leading to increased efficiency, streamlined operations, and enhanced collaboration across functions. Data sharing and integration become more prevalent, enabling organizations to derive valuable insights and make data- driven decisions. Level 4 represents a significant milestone in digital transformation, characterized by business model transformation. Organizations undergo
  • 23. 13 fundamental changes to their business models and strategies, driven by digital technologies. The integration of digital initiatives becomes deeply ingrained in the organization's DNA, resulting in innovative business models, new revenue streams, and disruptive changes in the market. At this stage, organizations become agile and adaptable, leveraging digital technologies to create unique value propositions and respond swiftly to market dynamics. Reaching the pinnacle of digital transformation, Level 5, entails ecosystem transformation. Organizations collaborate with external partners, customers, and suppliers to create a digital ecosystem that transcends industry boundaries. Emerging technologies, such as artificial intelligence, blockchain, and the Internet of Things, are leveraged to establish interconnected ecosystems. These ecosystems enable seamless integration and collaboration among diverse stakeholders, fostering innovation, and driving holistic digital transformation. It is important to note that these levels of digital transformation serve as a guide and may not be strictly sequential or applicable to every organization. The progression through these levels depends on various factors, including industry, organizational size, and strategic objectives. Nonetheless, understanding these levels helps organizations gauge their position in the digital transformation journey and plan their future initiatives accordingly. 1.1.4. Digital transformation measures of success Measuring the success of digital transformation initiatives is essential to evaluate the effectiveness of these efforts. One key measure of success is cost efficiency and return on investment (ROI). By assessing the financial impact of digital transformation, organizations can determine the cost savings, increased productivity, and efficiency gains resulting from digitalization. This evaluation helps in understanding the overall ROI and the financial benefits derived from digital transformation initiatives.
  • 24. 14 Customer satisfaction and experience play a vital role in measuring the success of digital transformation. Improving customer satisfaction and enhancing the overall customer experience are primary objectives of digital initiatives. Metrics such as customer feedback, Net Promoter Score (NPS), customer retention rates, and conversion rates can provide insights into the impact of digital transformation on customer satisfaction, loyalty, and business performance. Business agility and flexibility are critical factors in the success of digital transformation efforts. The ability to respond quickly to changing market conditions and customer needs is a key goal of digital initiatives. KPIs such as time-to-market, speed of product or service innovation, and adaptability to market changes can help organizations evaluate the success of their digital transformation in improving business agility and staying competitive in dynamic markets. Employee productivity and engagement are important measures of success in digital transformation. Engaging and empowering employees through digital initiatives can lead to increased productivity and satisfaction. Metrics such as employee satisfaction surveys, productivity levels, employee feedback, and retention rates can provide insights into the effectiveness of digital transformation initiatives in enhancing employee engagement and productivity. Process efficiency and automation are core objectives of digital transformation. By streamlining and automating business processes, organizations aim to improve operational efficiency and reduce costs. KPIs such as process cycle time, error rates, process cost reduction, and efficiency gains can be used to measure the success of digital initiatives in optimizing workflows and automating repetitive tasks. Data-driven decision making is a fundamental aspect of successful digital transformation. Organizations leverage data analytics, business intelligence tools, and data-driven decision-making frameworks to make informed decisions. Evaluating the effectiveness of these initiatives can be done by assessing the impact
  • 25. 15 of data-driven insights on decision-making quality, efficiency, and business outcomes. Technology adoption and integration are critical for successful digital transformation. Measuring the level of technology adoption across the organization, as well as the success of system integration efforts, provides insights into the progress of digital transformation. KPIs such as the percentage of employees trained on new technologies, system integration success rates, and the level of technology utilization can indicate the success of digital initiatives in driving technological advancements within the organization. Competitive advantage and market positioning are outcomes organizations strive for through digital transformation. Assessing factors such as market share, customer acquisition, brand value, and industry rankings helps organizations evaluate the impact of digital initiatives on their competitive position. By measuring these indicators, organizations can determine the success of their digital transformation in enhancing their market position and gaining a competitive edge. Security and risk management are critical considerations in digital transformation. Organizations must address cybersecurity challenges and effectively manage risks associated with digital initiatives. Evaluating KPIs such as the number of security incidents, risk mitigation effectiveness, and compliance with regulatory standards provides insights into the success of digital initiatives in ensuring a secure and resilient digital environment. Stakeholder satisfaction is a comprehensive measure of the success of digital transformation. It involves assessing the satisfaction of various stakeholders, including customers, employees, partners, and investors. Surveys, feedback mechanisms, and stakeholder interviews can be used to gather feedback and measure satisfaction levels, providing organizations with a holistic view of the success of their digital transformation efforts.
  • 26. 16 1.1.5. Challenges and success factors of digital transformation A successful digital transformation journey comes with its own set of challenges. This section explores the key challenges organizations face when undertaking digital transformation initiatives and identifies the success factors that can help organizations navigate and overcome these challenges. Legacy Systems and Infrastructure: One of the primary challenges in digital transformation is dealing with legacy systems and outdated infrastructure. Many organizations have complex, monolithic IT systems that are not designed to be easily integrated with modern digital technologies. The cost and complexity of modernizing these systems can pose a significant hurdle. Success in digital transformation often requires a careful evaluation of existing systems, prioritizing investments in technology upgrades, and adopting agile development practices. Organizational Resistance and Culture: Organizational resistance to change can impede digital transformation efforts. Employees may be resistant to new technologies, and unfamiliar processes, or fear the impact of automation on their roles. Overcoming resistance and fostering a digital culture requires strong leadership, effective communication, and a clear vision for the benefits of digital transformation. Engaging employees, providing training and support, and creating a culture of continuous learning and innovation are critical success factors. Talent Acquisition and Skill Gaps: Digital transformation requires a workforce with the right skill sets to leverage emerging technologies and drive innovation. However, there is often a shortage of digital talent in the market, and organizations may struggle to attract and retain skilled professionals. Success in digital transformation involves identifying skill gaps, investing in training and upskilling programs, and creating a talent acquisition strategy that aligns with the organization's digital goals. Data Security and Privacy: As organizations embrace digital technologies, data security, and customer privacy are paramount. Cybersecurity threats are
  • 27. 17 constantly evolving, and organizations must invest in robust security measures to safeguard sensitive data. Compliance with data protection regulations, such as the General Data Protection Regulation (GDPR), is also critical. Success in digital transformation requires a proactive approach to security, including implementing encryption, access controls, and regular security assessments. Strategic Planning and Execution: Digital transformation initiatives must be aligned with the organization's overall strategy and goals. A lack of strategic planning and alignment can result in fragmented efforts, duplication of investments, and suboptimal outcomes. Success in digital transformation involves developing a clear digital strategy, setting measurable goals, and establishing a roadmap for implementation. Effective project management and execution, with dedicated resources and accountability, are key success factors. Collaboration and Partnerships: Digital transformation often requires collaboration and partnerships with external stakeholders, such as technology vendors, startups, and industry collaborators. Organizations may lack the necessary ecosystem and networks to access the right expertise and technologies. Success in digital transformation involves identifying and nurturing strategic partnerships, participating in industry collaborations, and leveraging external expertise to accelerate innovation and overcome challenges. 1.2. Overview of Trade Facilitation 1.2.1. Understanding Trade Facilitation Trade Facilitation Agreement (TFA) is a global multilateral initiative to promote trade efficiency and economic growth worldwide by restricting excessive border bureaucracy, enhancing transparency, and leveraging emerging technologies. The TFA entered into force in 2017 following its ratification by two- thirds of the World Trade Organization (WTO) membership. According to estimates, the full implementation of the TFA measures will boost global trade by up to USD 1 trillion annually and lower average trade costs globally by about
  • 28. 18 14.3%, with a reduction of 14.1% for low-income countries, 15.1% for middle- income countries, and 12.9% for high-middle income countries (World Trade Report 2015). According to Organisation for Economic Co-operation and Development (OECD), in an interconnected world where goods often cross borders many times as both intermediate and final products, and against a background of supply chain disruptions, trade facilitation policies can:  Allow better access for organizations to production inputs from abroad and support greater participation in global value chains, including small- and medium-sized enterprises (SMEs).  Help lower overall trade costs and increase economic welfare, in particular for developing and emerging economies.  Ensure the timely delivery of medical goods and perishable agricultural products, both of which are highly sensitive to delays.  Promote the resilience of global supply chains and help meet the challenges and seize the opportunities of the digital and green transitions. Trade facilitation is becoming more and more essential. The increasing quantity of shipments crossing international borders increases demand while also posing new obstacles for trade facilitation. Furthermore, in response to the issues posed by the COVID-19 pandemic at borders, many economies boosted their use of digital tools to develop initiatives targeted at simplifying trade processes and documenting requirements. 1.2.2. The negotiation process of the WTO Trade Facilitation Agreement (TFA) TFA or Global customs rules are agreements adopted on the principle of consensus agreement of 160 member countries of the WTO. The process of negotiating the content of the Agreement started in July 2004. This is one of important work programs of the WTO Doha Round. The content of the Agreement
  • 29. 19 negotiated by member states judgments toward those fundamental goals are: (1) facilitate trade, ensure the balance between trade facilitation and ensure compliance with the law; (2) promote good fortune transfer, customs clearance of goods in trade international trade; (3) promote synergies between customs and other agencies in the process international movement of goods; (4) promote support technical assistance and capacity building of countries WTO members. In 2013, Ministerial Conference in Bali, Indonesia approved the Bali Declaration on Agreement content as well as the approval and signing process TFA end. The Bali Declaration adopted several significant Agreement-related issues, including:  Agree on the content of the Agreement in terms of text and structure,  Establishment of an Interim Committee to review the TFA legislation, draft the TFA Amendment Protocol as well as the Protocol ratification process.  Receiving commitments to implement Group A measures from developing country member countries.  On November 24, 2014, Protocol amending the WTO Agreement was approved and ratified by the WTO. From this moment, the Decree is open for ratification by Members. When two-thirds of the member countries complete the ratification, the Agreement will enter into force. Table 1: Comparing TFA content with the GATT principles
  • 30. 20 TFA Articles Scope GATT Articles Articles 1 to 5 Transparency Article X Articles 6 to 10 Fees and Procedures Article VIII Article 11 Transiting Articles Article V Articles 12 Other problems 1.2.3. Structure of WTO Trade Facilitation Agreement The Trade Facilitation Agreement aims to streamline and simplify customs procedures, enhance transparency, and promote efficiency in cross-border trade. The structure of the TFA included these sections: First is Preamble The preamble provides an introduction to the agreement, outlining the importance of trade facilitation for economic development, job creation, and poverty reduction. It highlights the principles of non-discrimination, transparency, and cooperation among WTO members. Section I: Provisions It contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It clarifies and improves the relevant articles (V, VIII and X) of the General Agreement on Tariffs and Trade (GATT) 1994. It also sets out provisions for customs cooperation. This section provides 12 articles (technical measures to facilitate trade following the Agreements). About transparency:  Article 1: Publication and Availability of Information  Article 2: Opportunity to comment, Information before entry into force, and Consultations
  • 31. 21  Article 3: Advance rulings  Article 4: Procedures for Appeal or Review  Article 5: Other Measures to Enhance Impartiality, Non- discrimination, and Transparency. Fees and procedures:  Article 6: Disciplines on Fees and Charges imposed on or in connection with Importation and Exportation and Penalties  Article 7: Release and Clearance of Goods  Article 8: Border agency cooperation  Article 9: Movement of Goods intended for import under Customs Control  Article 10: Formalities Connected with Importation, Exportation and Transit. Freedom of Transit:  Article 11: Freedom of Transit Customs Cooperation:  Article 12: Customs Cooperation Section II: Special and Differential Treatment – SDT This part has 10 articles containing special and differential treatment (SDT) provisions that allow developing and least-developed countries (LDCs) to determine when they will implement individual provisions of the Agreement and to identify provisions that they will only be able to implement upon the receipt of technical assistance and support for capacity building. To benefit from SDT, a member must categorize each provision of the Agreement, as defined below, and notify other WTO members of these categorizations following specific timelines
  • 32. 22 outlined in the Agreement. The roadmap for the implementation of groups A, B and C of developing and least developed countries is shown in the following figure: Category Timeline Requirements A Implement by the time the Agreement enters into force (or in the case of a least-developed country within one year after entry into force) N/A B Implement after a transitional period following the entry into force of the Agreement N/A C Implement on a date after a transitional period following the entry into force of the Agreement. The acquisition of assistance and support for capacity building. Section III contains provisions that establish a permanent committee on trade facilitation at the WTO, require members to have a national committee to facilitate domestic coordination and implementation of the provisions of the Agreement. It also sets out a few final provisions. Overall, the structure of the TFA provides a comprehensive framework for promoting and implementing trade facilitation measures among WTO members. By addressing specific areas of customs procedures, establishing institutional mechanisms, and ensuring support for developing countries, the TFA aims to streamline international trade, enhance transparency, and promote economic growth. 1.2.4. Meaning of WTO Trade Facilitation Agreement
  • 33. 23 The importance and necessity of the Agreement on International Trade in the contemporary global context can be seen in the following aspects: First, 160 WTO members are regarded as having agreed to the TFA as a means of facilitating trade. The Agreement establishes a mechanism for the WTO to enforce and keep track of the development of global trade facilitation. From the standpoint of state management in general and national borders in particular, TFA is regarded as an effective tool to harmonize, make transparent, and standardize legal norms and legal practice on inspection and supervision of the movement of products in international trade. Second, TFA helps to lower trade barriers, particularly non-tariff and technical ones that nations erect to safeguard intraregional and international commerce. The development of global trade has been and will continue to be significantly hampered by non-tariff and technical barriers, which raise the costs and duration of international trade transactions. Third, national border and customs enforcement agencies are becoming more crucial to global trade. The customs authorities of every nation are currently continually extending their activities to many other domains, such as: fighting terrorism, in addition to their core job of inspecting and monitoring the movement of commodities in international trade. Distribution and trade of illegal weapons, defense of intellectual property rights, assurance of food security, etc. This necessitates a legally enforceable process as well as good coordination among the parties on a global basis, which is the WTO's TFA. Fourth, the TFA, like other major WTO agreements, is very binding and flexible for member nations due to its dispute resolution structure and special treatment provisions for countries. undeveloped, as well as underdeveloped. Furthermore, the WTO Trade Facilitation Committee and the country work together to monitor and correct issues that arise in trade facilitation enforcement in order to accomplish the WTO's trade facilitation goals (Trinh Thi Thu Huong/ Phan Thi Thu Hien 2015, p.24).
  • 34. 24 1.3. Digital transformation in Trade facilitation 1.3.1. The impact of digitalization on trade: Digitalization expands the scale, scope, and speed of trade. It enables businesses to introduce new products and services to a bigger number of digitally connected clients around the world. It also enables firms, particularly smaller ones, to use new and innovative digital tools to overcome growth barriers, such as facilitating payments, enabling collaboration, avoiding fixed asset investment through the use of cloud-based services, and utilizing alternative funding mechanisms such as crowdfunding. The way we trade goods is also changing as a result of digitalization. For example, the rise of online platforms has resulted in an increase in the number of small packages traded across international borders. This raises several policy issues for policymakers, ranging from the physical management of parcel trade to the implications for risk management (such as counterfeit goods or biosecurity standards) and revenue implications in terms of tax and tariff collection. At the same time, new business models and technological advancements are altering the way services are generated and provided, concealing already blurry boundaries between commodities and services and modes of distribution and bringing novel combinations of the two. For example, a smart fridge needs market access for both the integrated service and the product. Additionally, a product made via 3D printing, for instance, may cross an international border as a design service but transforms into good at the point of consumption. Together, these problems present new challenges for the formulation of global trade and investment policy. Rapid developments in technology also help services to become more prevalent in cross-border international trade. The foundation of digital trade is made up of information and communication technology services, which also support the digitization of other types of services by providing the necessary network infrastructure. The development of digitally enabled services, which are supported
  • 35. 25 by a number of new services built on data-driven creative solutions like cloud computing, has also been made easier by new technology. In the digital age, old trade issues may have new consequences, such as the effects of burdensome border procedures on parcel trade or restrictions on newly tradable services, and new trade policy issues, such as differing regulations among nations about data flows, are emerging. More knowledge about the nature and scope of these developments is required to assist policymakers in creating an environment that encourages innovation and supports digital trade in goods and services. 1.3.2. Digital Transformation in Facilitating Trade Digital transformation and trade facilitation are deeply interconnected, shaping the modern landscape of global commerce. Digital transformation refers to the adoption of digital technologies and processes to revolutionize business operations, while trade facilitation focuses on removing barriers and streamlining procedures to enhance international trade. The relationship between these two concepts is symbiotic, with digital transformation empowering trade facilitation efforts and trade facilitation driving the need for digital transformation. The Agreement contains several provisions that require, or encourage, the use of digital technology, such as publication of information and forms on the Internet, electronic payment of duties and charges, and a single window for submission of import, export, and transit documentation. One of the primary ways digital transformation enhances trade facilitation is through automation and efficiency. By digitizing trade-related processes, such as documentation and customs procedures, businesses and governments can eliminate manual tasks, reduce paperwork, and expedite trade transactions. Automated systems enable faster processing times, minimize errors, and optimize resource allocation. This efficiency translates into significant time and cost savings for businesses, making trade more seamless and attractive.
  • 36. 26 Another vital aspect of the relationship between digital transformation and trade facilitation is the transition toward paperless trade. Through the digitization of trade documents, electronic signatures, and the implementation of digital platforms, the reliance on physical paperwork diminishes. This transition offers numerous benefits, including faster document processing, improved data accuracy, and enhanced security. Paperless trade reduces administrative burdens, simplifies cross-border transactions, and promotes interoperability between trading partners. Digital transformation also facilitates data sharing and connectivity, key elements in effective trade facilitation. By establishing digital platforms and information-sharing systems, stakeholders involved in international trade, such as businesses, customs authorities, and logistics providers, can exchange data in real- time. This connectivity enhances collaboration, transparency, and coordination throughout the supply chain. Timely access to accurate information enables stakeholders to make informed decisions, minimize delays, and address potential bottlenecks swiftly. The more advanced technologies such as blockchain, the internet of things, data analytics, artificial intelligence, and machine learning can greatly enhance the sharing, collection, analysis, and use of data which is important for many trade facilitation measures. Supply chain visibility is another critical aspect of the relationship between digital transformation and trade facilitation. Digital technologies, such as IoT, RFID, and blockchain, enable real-time tracking and tracing of goods throughout the supply chain. This visibility ensures greater transparency and accountability, enabling businesses and authorities to identify potential risks, optimize inventory management, and enhance overall supply chain efficiency. Enhanced visibility improves trade facilitation by reducing uncertainties, facilitating risk management, and enabling prompt responses to disruptions. Furthermore, digital transformation contributes to enhanced compliance and risk management in trade facilitation. Advanced digital platforms can integrate risk
  • 37. 27 assessment tools, automated compliance checks, and data analytics to identify and mitigate potential risks in trade transactions. By automating compliance procedures and leveraging data-driven insights, businesses and authorities can ensure adherence to trade regulations, mitigate fraud and security threats, and maintain the integrity of cross-border trade. This strengthens trust among trading partners and enhances overall trade facilitation efforts. Lastly, digital transformation expands access to global markets, particularly for small and medium-sized enterprises (SMEs). Through e-commerce platforms, digital marketplaces, and online marketing channels, businesses can reach customers worldwide and participate in international trade. Digital technologies enable SMEs to overcome traditional barriers to entry, such as geographical constraints and limited resources. This broader access to global markets fosters entrepreneurship, stimulates economic growth, and promotes inclusivity in trade facilitation. Customs administrations are already using these technologies to validate certifications of origin, improve risk management and customs audit, increase efficiency in customs clearing, and eliminate manual procedures. However, implementing new technologies can be costly and difficult. Prior to implementation, a member should assess the technologies and needs of border agencies and develop a technology strategy with assistance from the business sector. To conclude, digital transformation and trade facilitation share a mutually reinforcing relationship. Digital transformation empowers trade facilitation efforts by automating processes, enabling paperless trade, enhancing data sharing, improving supply chain visibility, and facilitating compliance. On the other hand, trade facilitation drives the need for digital transformation by demanding streamlined and efficient trade processes. Embracing digital transformation in trade facilitation can lead to more seamless, efficient, and inclusive international trade, benefiting businesses, governments, and consumers alike.
  • 38. 28 1.4. Experiences from other countries for digital transformation in Trade Facilitation 1.4.1. The trend of other countries implementing digital transformation in trade facilitation In the world, facilitating trade has appeared many times ago, a lot of states and organizations had started to apply digital transformation to enhance their trade sector, to facilitate trade flows. For instance, The World Customs Organization (WCO) has proposed a model for customs development called "Customs in the Digital Age" consisting of six stages (Stage 1: Electronic Customs Startup; Stage 2: Electronic Customs Preliminary; Stage 3: In-depth Electronic Customs for Each Sector; Stage 4: Integrated Electronic Customs; Stage 5: Advanced Electronic Customs; Stage 6: Digital Customs). Currently, customs administrations worldwide are focusing on building digital customs agencies, with a major emphasis on digitization and the application of Fourth Industrial Revolution technologies. The development plan of the United States Customs and Border Protection for the period 2021-2025 also highlights the specific goal of digital transformation. This includes making data-driven decisions and timely data analysis. To achieve this objective, the US Customs and Border Protection has identified three key activities to be implemented during the period 2020-2025: the use of modern analytical techniques, enhancing the IT system for high-quality data collection and connectivity, and sharing data and analytical techniques. Additionally, the US Customs and Border Protection has established an Innovation and Technology Improvement Team within its Office of Trade, responsible for researching, proposing, and implementing the latest technologies to enhance border operations, with a focus on four areas: increasing automation, AI/advanced analytics, sensors and data sharing, and information. From 2021 to 2025, the Canada Border Services Agency has developed and implemented a digital transformation strategy with a focus on improving its IT system and data analysis. This strategy includes establishing central-level
  • 39. 29 organizational management structures, as well as investments in three main areas: data management, business intelligence (BI), and advanced analytics. Similarly, China Customs is currently developing an IT system to support its intelligent customs management, with a focus on digital transformation and the application of Industry 4.0 technologies to meet the requirements of smart customs management. Furthermore, customs administrations in Japan, South Korea, and the European Union (EU) are also actively promoting digital transformation and the application of Industry 4.0 technologies, such as Artificial Intelligence (AI), Big Data, Blockchain, and Internet of Things (IoT) connectivity. As a result, the level of ICT application in customs administrations in these developed countries has reached advanced stages, as outlined in the "Customs in the Digital Age" model (levels 5 and 6). In 2022, under the theme "Promoting Digital Customs Transformation through Data Exploitation Culture and Building Data Ecosystem," the World Customs Organization (WCO) emphasized another aspect of digital customs, which is the importance of available data, cooperation with relevant parties to collect quality data, and leveraging this data for customs operations. In conclusion, smart customs, digital customs, or intelligent borders are essential processes that involve the application, utilization, and integration of modern technologies and data into customs operations and procedures to fulfill the fundamental tasks of customs agencies, which are to facilitate trade, collect revenue, and ensure security and societal safety. This process, though known by various names such as automated customs, intelligent customs, digital customs, or under programs of innovation, reform, and modernization, takes place at different levels in each country, depending on its level of development. The varying levels of technology application and the recent emphasis on "data" can be understood as the stages outlined in the WCO's "Customs in the Digital Age" development model. 1.4.2. Experiences from some Asian countries
  • 40. 30 Several Asian countries have been at the forefront of applying digital transformation to facilitate trade, resulting in significant improvements in trade efficiency and competitiveness. One notable example is Singapore, which has been a leader in embracing digital solutions for trade facilitation. Singapore's TradeNet and Networked Trade Platform (NTP) are comprehensive digital platforms that enable electronic submission of trade documents, online payment systems, and real- time tracking of goods. These initiatives have streamlined customs procedures, reduced paperwork, and significantly expedited clearance times, enhancing transparency and boosting Singapore's position as a global trade hub. South Korea is another Asian country that has successfully implemented digital transformation in trade facilitation. The country's Automated Customs Clearance System (ACCS) allows traders to submit electronic customs declarations and documents, automating customs procedures and improving data accuracy. South Korea has also embraced electronic payment systems and advanced risk management tools, harnessing the power of digital technologies to enhance trade efficiency and security. China, with its vast trade volume, has also undergone a remarkable digital transformation in trade facilitation. The country's National Single Window (NSW) integrates trade-related procedures, providing a centralized platform for electronic submission of documents and data. China's digital initiatives have resulted in improved customs clearance efficiency, reduced trade costs, and enhanced transparency. The establishment of Cross-border e-Commerce Comprehensive Pilot Zones has further facilitated the digitalization of cross-border trade, enabling seamless transactions and promoting the growth of e-commerce. In the United Arab Emirates (UAE), digital transformation has played a crucial role in trade facilitation. The UAE's Dubai Trade portal offers a range of digital services, including electronic customs declarations, online payment systems, and digital trade platforms. The country has also implemented advanced risk management systems to ensure secure and efficient trade transactions. These digital
  • 41. 31 initiatives have enhanced the UAE's competitiveness as a global trade and logistics hub, attracting businesses and promoting economic growth. Similarly, Malaysia has embraced digital transformation to streamline trade processes and enhance efficiency. The implementation of the National Single Window (NSW) system allows traders to submit electronic customs declarations and documents, simplifying procedures and reducing paperwork. Malaysia has also adopted electronic payment systems, electronic certificates of origin, and digital trade platforms, promoting transparency and facilitating seamless trade transactions. The experiences of these Asian countries demonstrate the transformative power of digitalization in trade facilitation. By leveraging digital technologies, these nations have significantly improved trade efficiency, reduced administrative burdens, and enhanced transparency in cross-border transactions. Their success stories serve as valuable models for other countries looking to leverage digital transformation for trade facilitation and economic growth. CHAPTER 2: SITUATION OF DIGITAL TRANSFORMATION ON TRADE FACILITATION IN VIET NAM 2.1. An overview of trade facilitation in Viet Nam before digital transformation At the APEC Economic Leaders' Meeting in Busan in 2005, Viet Nam promised to implement trade facilitation measures in response to the APEC leaders'
  • 42. 32 proposal for a 5% reduction in trade transaction costs by 2006 and a further 5% reduction by 2010. Trade facilitation is a key component of Viet Nam's Socio- Economic Development Strategy, 2011-2020, which aimed to improve the country's business environment in order to maintain trade development and double GDP per capita by 2020 compared to 2011. The strategy was translated into a number of legislative instruments, including government decrees and ministerial directives aimed at improving the business environment and national competitiveness, as well as measures aimed at promoting Vietnamese enterprises. These legislative papers continue to be among the most prominent legal foundations regulating the trade facilitation process in Viet Nam. On 4 October 2016, The National Steering Committee on the ASEAN Single Window, the National Single Window, and Trade Facilitation (NATF) was established by an order from the Prime Minister. In compliance with the WTO TFA, the NATF serves as the National Trade Facilitation Committee of Viet Nam. Following this decision, the General Department of Viet Nam Customs, also known as Viet Nam Customs, was given the responsibility of serving as the coordinator for the implementation of the trade facilitation initiatives. The government agencies worked with the Ministry of Finance to implement the WTO TFA’s commitments include the Ministry of Industry and Trade (MOIC); the Ministry of Transport; the Ministry of Science and Technology; the Ministry of Information and Communications; the Ministry of Health; the Ministry of Agriculture and Rural Development (MARD); the Ministry of Natural Resources and Environment; the Ministry of National Defence; the Ministry of Culture, Sports and Tourism; and Viet Nam Chamber of Commerce and Industry (VCCI). On 13 October 2016, the Prime Minister of Vietnam signed an order enabling a plan for the preparation and execution of the WTO TFA, including a specific framework to direct and oversee the trade facilitation process at all administrative levels, from central to local government agencies. Vietnam developed a timetable to execute trade facilitation measures, which are divided into categories A, B, and C in
  • 43. 33 accordance with WTO TFA requirements, and submitted it to the WTO on October 15, 2014. Between 2018 and 2020, trade facilitation performance significantly improved in several areas, particularly in the accessibility of information, advance rulings, fees, and charges, automation of customs procedures and documents, and simplification of customs operations. The World Bank's Doing Business in 2018 report, which reveals that Viet Nam's overall ranking in the Doing Business Index in 2018 increased by 14 spots from 82 to 68 out of 190 economies, reaffirmed the evaluation (World Bank, 2018b: 2). An important step forward in streamlining customs procedures and increasing investment in the logistics structure to improve connectivity was made by Viet Nam, as evidenced by the World Bank's Logistics Performance Index (LPI) survey, which placed the country 39th globally in 2018 from 64th in 2016 (World Bank, 2018a: 1). Trade income climbed 12% to approximately $480 billion in 2018 thanks to the government's ongoing efforts and sustained commitment to adopting trade facilitation measures. Despite impressive advances in trade facilitation, remaining problems pose a threat to the sustainability of such gains. The importation of commodities is governed by about 300 legality documents published and maintained by line ministries or government organizations. Complying with complex trade regulations requires substantial resources and time. In 2017, around 57.5% of items were classified to the green lane, where customs scrutiny is mostly waived, 37.4% of imported goods were subject to stricter inspection in the yellow lane, and 5.1% of imported goods were submitted to physical examination in the red lane. The figures are greater than those of ASEAN neighboring countries with comparable levels of economic growth. In 2018, Viet Nam surpassed Malaysia in the customs LPI rating and was the top-performing lower middle-income country in the LPI. This significant improvement in trade facilitation coincided with a significant increase in FDI inflows and a dramatic increase in exports and imports.
  • 44. 34 A VCCI survey on the evaluation of Vietnamese companies' satisfaction with customs procedures in 2017 (Thoi bao tai chinh Viet Nam Online, 2017) revealed that 46% of traders had trouble following customs regulations and 23% were dissatisfied with the coordination between customs and the appropriate agencies, which led to delays in customs clearance. Similarly, only 20% of traders were entirely satisfied with customs agencies' expertise and proficiency. Many traders expressed dissatisfaction with the overly ambiguous and opaque administrative formalities and procedures. Furthermore, limited infrastructural capacity and a lack of effective logistics and transportation are impeding commodity mobility. The government must exert considerable effort to ensure that trade facilitation measures benefit both traders and the economy as a whole. Figure 1. Trade Facilitation Performance in Viet Nam (2022) In terms of information accessibility, appeals processes, fees and charges, streamlining of processes, and internal border agency cooperation, Viet Nam comes the closest to exhibiting the best performance across the sample. Since 2019, performance has increased in the following areas: accessibility of information, simplification of processes, cooperation between internal and external border agencies, governance, and impartiality.
  • 45. 35 For lower middle-income countries like Viet Nam, the assessment of trade facilitation measures has identified key areas where reforms can have the greatest positive impact on bilateral trade flows and trade costs. These areas include formalities, governance and impartiality, information availability, involvement of the trade community, advance rulings, and appeal procedures. To further enhance trade facilitation, Viet Nam would benefit from ongoing improvements in the following areas:  Advance rulings: Improving the availability of information on advance rulings and considering increasing the validity period of advance rulings.  Fees and charges: Reducing the number and diversity of fees and charges collected, as well as lowering the fees charged for services during normal working hours.  Formalities - documents: Expanding the acceptance of copies of documents, reducing the number of trade-related documents, and minimizing the time required to prepare such documents.  Formalities - automation: Promoting the availability of full-time automated processing for Customs, improving the quality of telecommunications and IT infrastructure supporting border process automation.  Formalities - procedures: Further reducing the percentage of physical inspections, expanding the possibility of goods being released prior to final determination and payment of Customs duties for all types of goods, increasing the coverage of Authorized Operator programs, supporting risk management systems for controls by other border agencies, simplifying procedures in terms of time and costs, and fully aligning Customs working hours with commercial needs.
  • 46. 36 Implementing improvements in these areas will contribute to the overall enhancement of trade facilitation in Viet Nam, leading to increased trade flows and reduced trade costs. 2.2. Current situation of digital transformation in Viet Nam 2.1.1. Relative legal principles of digital transformation in Viet Nam Digital government aids in improving government performance in all areas - efficiency, effectiveness, transparency, and reduced corruption. With the support of the digital economy, we can break free from the middle-income trap by fostering innovation, creating new values, improving labor productivity, and developing new economic engines. The development gap is closed and inequality is decreased because of the digital society, which also provides equitable access to services, education, and knowledge. Businesses and fields are intelligently and optimally optimized to improve people's experiences and quality of life. Recognizing the meaning and importance of digital transformation, our Party and State have set out guidelines and issued many policies to strongly promote national digital transformation, and develop the digital economy and digital society to create a breakthrough in improving labor productivity and the economy's quality, efficiency, and competitiveness. Specifically, Decision No. 749/QD-TTg (June 3, 2020) of the Prime Minister approving the "National digital transformation program to 2025, orientation to 2030” identified digital transformation in Viet Nam as three pillars: digital government; digital economy; digital society. The Ministry of Home Affairs has issued many documents, such as Decision No. 151/QĐ-BNV (February 25, 2021), by the Minister of Home Affairs approving the Digital Transformation Plan of the Ministry of Home Affairs from 2021 to 2025, with an orientation to 2030; Decision No. 1198/QD-BNV (November 18, 2021) of the Minister of Home Affairs approving the Digital Transformation Project of the Ministry of Home Affairs from 2021 to 2025 and orientation to 2030. The transformation task is clearly outlined in the scheme. The digital transformation model, goals, and solutions of the Ministry of Home Affairs must be clarified,
  • 47. 37 including general solutions, solutions to build a digital government, digital transformation in the Ministry of Home Affairs' fields, and so on. The Party Personnel Committee of the Ministry of Home Affairs declared in Resolution No. 21-NQ/BCSĐ (July 28, 2022) on digital transformation to 2025, orientation to 2030: “Digital transformation of the Ministry of Home Affairs has been implemented based on the Party's resolutions and principles on building the political system, renewing the leadership method, and enhancing the leadership role of the Party, Party committees at all levels and agencies and units under and directly under the Party. The Ministry of Finance is fully aware of the content, requirements, and importance of digital transformation, considering digital transformation as a key task to improve the quality and performance of each agency and unit. Clearly define the responsibilities of collectives and heads of agencies and units under and under the Ministry to promote the digital transformation of the Ministry of Home Affairs…”. Besides, Resolution No. 21-NQ/BCSĐ also stated: “Transforming the Ministry of Home Affairs' activities in the digital environment. The direction, administration, inspection, supervision, and professional activities of the Ministry of Home Affairs are carried out using data and digital technology, increasing management effectiveness and efficiency; meet the requirements of implementing the National Digital Transformation Program to 2025, with a vision to 2030 in line with the practical conditions of the Ministry of Home Affairs to develop e- Government toward the Ministry of Digital generate easily accessible and usable open data, accelerate work processing, encourage the usage and storage of digital documents, cut operating expenses and time, and eventually construct a modern and economical working environment". As a result, it is necessary to develop applications and services for the common use of digital infrastructure and digital platforms; use intelligent analysis tools to assist Ministry leaders in making timely and accurate decisions in state management in the field of Home Affairs; and provide digital services to help people easily access and use.
  • 48. 38 Also, the Ministry of Finance of Viet Nam has issued various resolutions, plans, and action programs to address the aforementioned challenges. For instance, Resolution No. 02-NQ/BCSĐ (March 9, 2018) issued by the Party Committee of the Ministry of Finance, focuses on the application of technology in the financial and budgetary sectors as part of the Fourth Industrial Revolution. The Ministry of Finance also issued an Action Plan accompanying Decision No. 1874/QD-BTC (November 27, 2020) to implement the Prime Minister's Decision No. 749/QD-TTg (June 3, 2020) approving the National Digital Transformation Program until 2025 with a vision towards 2030. Furthermore, on October 25, 2021, the Ministry of Finance released Decision No. 2042/QD-BTC, approving the Plan for the application of information technology in the ministry's activities, the development of e-Government, and ensuring cybersecurity during the period 2021-2025. This decision emphasizes the implementation of digital transformation and the application of technologies from the Fourth Industrial Revolution in the state management of the financial sector, including customs. These resolutions, plans, and action programs demonstrate the Ministry of Finance's commitment to driving digital transformation and technology adoption in the financial sector, including customs. They provide a strategic framework and guidelines for integrating digital technologies, enhancing information management, and ensuring the security of networked information systems. Through these initiatives, the Ministry of Finance aims to improve trade facilitation, streamline administrative procedures, promote transparency, and enhance the efficiency of customs operations in Viet Nam. By leveraging the potential of the Fourth Industrial Revolution, the Ministry of Finance seeks to optimize its functions and provide better services to businesses, contributing to the overall development and competitiveness of Viet Nam's economy. 2.1.2. Viet Nam’s current state of digital transformation In Viet Nam, digital transformation was still a significant "barrier" a few years ago. Up to 30.7% of enterprises claimed to have heard of it but were unsure on what to do, and 38% expressed conversion-related uncertainty. According to a
  • 49. 39 2019 survey by the Viet Nam Software and IT Services Association Vinasa, many people are unsure of where digital should begin or do not comprehend how computerization differs from digital transformation. To date, however, businesses have a clear understanding of the value of digital transformation, and they are more driven than ever to put it into practice. However, businesses have numerous challenges when starting their actual implementation, particularly small and medium-sized businesses. These firms are now dealing with issues like: a lack of digital skills and human resources (17%), a lack of IT platforms robust enough to support digital transformation (16%), a lack of digital thinking or digital culture issues in the company (15.7%),... The Government of Viet Nam has continuously established digital transformation programs for enterprises to address the aforementioned issues and advance the growth of Viet Nam's digital transformation. The "National Digital Transformation Program up to 2025, with a vision to 2030" has established targets for the development of the digital economy and a strategy for Viet Nam to join the group of 50 leading nations by 2025 about information technology. According to a VCCI survey of more than 400 companies of all sizes, Vietnamese companies have started to recognize and use digital technology in areas including internal administration, sales, marketing, logistics, production, and payment after the pandemic. Up to 98% of businesses anticipate significant changes in production and business operations as a result of implementing digital transformation, with cost-cutting potential accounting for more than 71% of those changes. Other major changes include a reduction in paperwork for businesses (61.4%), an increase in product and service quality (45.3%), and the ability to increase productivity. Digital Transformation takes place in several sectors: Several industries and fields need to prioritize digital transformation first, in which, focusing on the implementation of initiatives to link industries and fields to provide a new and completely different experience, bringing value to customers. value for people, businesses, and society.
  • 50. 40 Digital transformation in the medical field Develop a framework to support remote medical examination and treatment in order to assist minimize the load on medical facilities, restrict crowded contact, and reduce the danger of cross-infection. 100% of medical facilities have remote medical examination and treatment departments; encouraging the health sector's digital transformation. Building and gradually forming a health care and disease prevention system based on digital technologies; broadly applying digital technology at medical examination and treatment facilities, contributing to administrative reform, reducing hospital workload, improving medical examination and treatment quality, and using electronic medical records to move away from using patients. Paper initiatives, hospital fees, and the formation of smart hospitals; the development of a smart health management platform based on digital technology, the integration of information and data, and the formation of a national health database. Piloting the implementation of the initiative "Each citizen has a personal doctor" with the goal of providing each citizen with a digital record of personal health; on that basis, the doctor advises and cares for each citizen as follows: is a personal doctor, forming a complete digital health care system from primary health care, prevention, and treatment. Create a legal corridor to facilitate telemedicine and electronic prescriptions for people, to ensure that people can contact doctors quickly and efficiently, reducing costs and patient transportation time. Digital transformation in the field of education Developing a support platform for distance learning and teaching, thoroughly applying digital technology in management, teaching, and learning; digitizing documents and textbooks; building a platform to share teaching and learning resources in both face-to-face and online forms. Developing technology for education, towards personalized training.
  • 51. 41 100% of educational institutions implement distance learning and teaching, in which pilot training programs allow students to study online at least 20% of the program's content. Use digital technology to assign homework and check students' preparation before class. Digital transformation in the field of finance - banking Build e-finance and establish a modern and sustainable digital financial foundation. Implement comprehensive application of digital technology in tax, customs, treasury, and securities industries. Digital transformation in commercial banks to provide digital banking services in the direction of diversifying distribution channels, innovating, automating processes, and promoting cooperation with financial technology companies. Fintech and payment intermediaries in building a banking-financial service ecosystem to promote national financial universalization, bringing financial-banking services closer to people in remote areas. remote areas have not been able to access or have not been served by banks based on technological innovations such as mobile payment, and peer-to-peer lending. Support loan accessibility with credit scoring solutions with a reliable customer database and scoring model. Digital transformation in agriculture To develop hi-tech agriculture in the direction of focusing on smart agriculture and precision agriculture, increasing the proportion of digital agriculture in the economy. Data must be the foundation for agricultural digital transformation. Build large data solutions for the land, farming, cattle, and fishing industries. establishing a ground- and airborne observation and monitoring network for agricultural activities. Encourage the sharing of agricultural equipment through digital platforms and the dissemination of information to farmers about the environment, the weather, and the quality of the soil in order to increase production and crop quality.
  • 52. 42 Implementing digital technology to automate production and commercial processes; managing and monitoring product origin and supply chain to ensure speedy, transparent, accurate, safe, and food hygiene. To ensure that every farmer is informed and trained in the use of digital technology in the future, think of launching the program "Each farmer is a trader, each cooperative is an enterprise applying digital technology". create, supply, distribute, predict (price, season, etc.) the availability of agricultural products, and encourage the growth of e-commerce in the agricultural sector. Implement strong digital transformation in management to have timely policies and administration of agricultural development such as forecasting, market warning, and planning management. Digital transformation in the field of transportation and logistics Develop intelligent traffic systems with an emphasis on national, state, and urban highways. Transformation of logistics infrastructures (including ports on the sea, inland waterways, airports, railroads, and logistics). Develop platforms that connect shippers, carriers, and customers to create a one-stop system that will allow shippers to accurately determine the best method for transporting their goods and warehouses, as well as receive assistance with packaging and registration, completing the processing of related administrative documents. Transforming traffic infrastructure management, transportation business management, vehicle driver management, enabling digital traffic infrastructure management, vehicle registration and management through digital records, and issuing and managing digital vehicle driver licenses. Digital transformation in the energy sector Digital change in the energy sector, with a focus on optimizing and automating networks to ensure efficient electricity delivery.
  • 53. 43 Connect digital meters to enhance speed and billing accuracy, uncover network faults sooner, assist users in energy conservation, and detect electrical power outages. Digital transformation in the field of natural resources and environment Building comprehensive information systems and large databases for effective management of natural resources and environment, such as National land database; databases on other fields (national geography; natural resources and environment monitoring; biodiversity; waste sources; remote sensing; seas and islands; climate change; meteorology - hydrology; geology - minerals;...); building an open national digital map as a foundation for the development of digital services for socio-economic development; deploying smart solutions in monitoring, monitoring, management, handling environmental incidents, early warning of natural disasters. Digital transformation in the field of industrial production Digital transformation in the field of industrial production in the direction of focusing on developing the following pillars: building smart strategies and organizational structures, building smart factories, intelligently operating, and creating smart products. intelligence, building data services and developing digital skills for employees. 2.1.3. Viet Nam’s level of digital transformation adaptation: Viet Nam is currently undergoing a significant level of digital transformation, which can be characterized as being in the transition between Level 2 and Level 3 of the digital transformation framework. At Level 2, Viet Nam has made notable progress in implementing digital technologies within specific functions or departments. Various sectors, including e- commerce, finance, and telecommunications, have witnessed significant digital advancements. The adoption of digital tools and automation has improved operational efficiency and customer experiences in these sectors. Additionally, the
  • 54. 44 government has initiated digital transformation efforts, focusing on areas such as e- government services and digital infrastructure development. As Viet Nam moves towards Level 3, the country is aiming to integrate digital technologies into core business processes across different sectors and industries. The government has emphasized the importance of digitalization in multiple aspects, including finance, education, healthcare, and transportation. Efforts are being made to promote data sharing, improve connectivity, and enhance digital skills and literacy among the population. The objective is to achieve a more comprehensive and organization-wide digital transformation, where digital technologies become deeply embedded in business operations and decision-making processes. Viet Nam's commitment to digital transformation is evident through initiatives like the National Digital Transformation Program, which seeks to create a comprehensive digital ecosystem and leverage digital technologies for economic growth and competitiveness. The government's focus on promoting e-commerce, developing digital infrastructure, and enhancing cybersecurity measures also aligns with the goals of Level 3 transformation. It is worth noting that Viet Nam's level of digital transformation may vary across different sectors and regions within the country. While certain industries, such as e-commerce and fintech, have experienced significant digital advancements, there is still room for progress in other sectors. Challenges related to infrastructure development, digital skills gap, and regulatory frameworks may impact the pace and extent of digital transformation in Viet Nam. So to be clarify, Viet Nam is currently in the transition phase between Level 2 and Level 3 of digital transformation. The country has made significant strides in implementing digital technologies within specific functions and sectors, and efforts are being made to integrate these technologies into core business processes across various industries. With the government's commitment and ongoing initiatives, Viet Nam is poised to further advance its digital transformation journey and capitalize on the opportunities presented by the digital age.