Giáo trình luật thương mại quốc tế

HANOI LAW UNIVERSITY

TEXTBOOK
INTERNATIONAL TRADE
AND BUSINESS LAW
 
 

Edited by
Professor Dr Surya P. Subedi
DPhil (Oxford); Barrister (England)
Professor of International Law
School of Law, University of Leeds, UK 

THE PEOPLE’S PUBLIC SECURITY PUBLISHING HOUSE
HANOI - 2014


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This Textbook has been prepared with financial assistance from the
European Union. The views expressed herein are those of the authors and
therefore in no way reflect the official opinion of the European Union nor
the Ministry of Industry and Trade.


 

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LIST OF AUTHORS
Nguyen Thanh Tam
and Trinh Hai Yen

Chapter 1; and Chapter 3 - Section 1,
Section 2; and Chapter 4 - Section 3

Nguyen Dang Thang

Chapter 2 - Section 1, Section 2

Nguyen Duc Kien

Chapter 2 - Section 3;
and Chapter 5 - Section 4

Federico Lupo Pasini

Chapter 2 - Section 4, Section 7;
and Chapter 4 - Section 1

Nguyen Nhu Quynh

Chapter 2 - Section 5

Nguyen Thi Thu Hien

Chapter 2 - Section 6

Nguyen Ngoc Ha

Chapter 2 - Section 8

Andrew Stephens

Chapter 3 - Section 3

Trinh Hai Yen

Chapter 3 - Section 4;
and Chapter 4 - Section 2

Le Hoang Oanh

Chapter 3 - Section 5

Nguyen Minh Hang

Chapter 5 - Section 1

Ho Thuy Ngoc

Chapter 5 - Section 2, Section 3 (Items 4-5);
and Chapter 7 - Section 6

Vo Sy Manh

Chapter 5 - Section 3 (Item 1, Item 3)

Marcel Fontaine

Chapter 5 - Section 3 (Item 2)

Nguyen Ba Binh

Chapter 6 - Section 1

Nguyen Thi Thanh Phuc

Chapter 6 - Section 2

Ha Cong Anh Bao

Chapter 6 - Section 3

Trinh Duc Hai

Chapter 7 - Sections 1-5


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FOREWORD

5

INTRODUCTION FOR THE SECOND PUBLICATION
This Textbook is one of the tangible results of the contribution that the
EU funded trade related technical assistance Projects provided for the
university institutions in Viet Nam.
Since its first publication in 2012 with the support of Multilateral
Trade Policy Assistance Project (EU-Viet Nam MUTRAP III), this book has
been adopted as a basic Textbook in many different universities in Viet
Nam and it is now one of the main reference materials for all those
interested in having knowledge of the complex rules governing international
trade. Combining Vietnamese and English part in one publication made this
publication useful, not only with providing professional knowledge for
bachelor students in Viet Nam, but also helping them improve legal English
skills. Besides, this has been also appreciated by lawyers and Government
officials that have the complicated tasks of making concepts, agreements
and technical terms normally utilized in the international trade practice
understandable respectively to their clients or national public institutions in
Vietnamese language.
Recognising the Textbook as a precious reference and to meet the
increasing need of getting knowledge and information regarding
international trade and business law, European Trade Policy and Investment
Support Project (EU-MUTRAP) and Hanoi Law University decided to
reprint the Textbook and introduce this republication to our valued readers.

 

Bui Huy Son

Phan Chi Hieu

Project Director
EU-MUTRAP

Rector
Hanoi Law University


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TEXTBOOK INTERNATIONAL TRADE AND BUSINESS LAW

FOREWORD
This Textbook has been prepared with the support of the Multilateral
Trade Assistance Project III (EU-Viet Nam MUTRAP III) funded by the
European Union, and it is the result of the contribution of national and
international academics and trade law experts. The cooperation between
Vietnamese and international experts testifies the definitive integration of
Vietnam in the international cultural system. The trade and economic world
integration of Vietnam achieved with the accession to the WTO in 2007
contributed in a decisive manner to the full participation of Vietnamese
experts and academics in the world scientific and cultural community.
Indeed, a growing number of Vietnamese students and academics which are
involved in international exchange programmes and this Textbook are the
evidence of this phenomenon.
With the support of EU-Viet Nam MUTRAP III Project and other
development cooperation programmes, the curricula of the main universities
in Vietnam have been updated to take into consideration the rapid
evolutions of the trade and economic situation. This Textbook, mainly
directed to bachelor students, provides a picture of the legal aspects of the

most relevant international trade issues. While recognizing the differences
between the international ‘public’ and the ‘private’ trade law, the editor and
contributors of the Textbook recognized that the two different disciplines
cannot be studied separately. Lawyers and legal experts must have a
thorough knowledge of all the aspects involving an international transaction,
from the competent jurisdiction to settle any pathologic aspect of an
international contract to the market access’ rights protected by the WTO in a
third country. Besides that, the Textbook is also a combination of global
(WTO, Vienna Convention of the International Sales of Goods), regional
 


FOREWORD

7

(EU, NAFTA and ASEAN), bilateral (the agreements between Vietnam and
some trading partners) and Vietnamese relevant rules. The Textbook benefited
from the contribution of experts and academics combining the technical to
the geographical expertise: for example, an US contributor wrote the section
on NAFTA while an European drafted the section dedicated to the EU,
while Vietnamese authors focused on the domestic relevant trade aspects.
The result is a Textbook which captures different views regarding the law
regulating international trade. This Textbook is a good example of what the
Vietnamese lawyers and legal experts will have to face once they will start
their professional life: a world characterized by harmonized international
rules, common rules of legal interpretation but different attitudes regarding
the practical implementation of the day-by-day commercial operations. The
need to improve the trade relations, particularly important for an open
economy like Viet Nam, requires the ability to understand these different

attitudes and, when possible, to identify the best international practices
which could be reproduced into the domestic legal framework.
The Textbook is also a good instrument for government officials daily
confronted with a dynamic international arena and eager to know the basic
information regarding various aspect of international trade law.
This Textbook is really a small reproduction of the real world Vietnamese
lawyers and legal experts will have to face and it is an excellent starting
point for all those interested in having a basic knowledge of the complex set
of rules dealing with international trade.
Nguyen Thi Hoang Thuy

Project Director
EU-Viet Nam MUTRAP III

 


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TEXTBOOK INTERNATIONAL TRADE AND BUSINESS LAW

PREFACE
International Trade and Business Law is about empowering states in
some areas and facilitating their business or other transactions with other
states and entities - while restraining their activities in other areas for the
greater good of the individual and the society, both national and international.
This body of law aims to lay down the rules of fair play in the conduct of
international economic relations to ensure a fairer society for all. In other
words, the role of International Trade and Business Law is to ensure a level
playing field for all states in order to enable them to maximize their

potential and/or to optimize their unique selling points. Each and every
individual is gifted with some unique qualities or strengths; the legal system
of any state should be designed to enable these individuals to fulfill their
potential without harming or undermining the interests of others in the
society. The objective is for individuals to pursue their dreams - whatever
these may mean to them. Some people are happy to become millionaires or
even billionaires, while some others are happy to become nuns or monks, or
to work for charitable organizations.
The same is true of nation-states: basically, a collection of individuals
bound by certain common characteristics and objectives. Therefore,
International Trade and Business Law, is designed to enable states to offer to
the international community what they have; this is in return for what other
states have to offer to them. Thus, the element of reciprocity and the
promotion of national interests lie at the heart of human behaviour, and
states are no exception. This is especially the case with International Trade
and Business Law.
Dissimilarly to other specific areas of international law, International
Trade and Business Law is directly relevant to the economy and prosperity


PREFACE

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of a nation. In other words, it concerns directly the basic economic interests
of a nation. Hence, each and every state is careful in accepting the rules
governing international trade and business. Every state knows, however,
that without accepting certain basic principles of international law of trade
and business it would not be able to trade with other states or otherwise to
engage in other business activities.

The irony in the world of international trade is that every state wishes
other states to open their doors as widely as possible by pursuing policies of
trade and economic liberalization; conversely, states may also try to close
their own doors as tightly as possible by pursuing protectionist policies. Here,
indeed, is where the law is needed: to intervene to ensure fair play, and fairly
to settle disputes in the case of foul play. The role of the law may be
described as akin to that of a referee or an umpire in a sports match whose
sole purpose is to ensure fair play. Associated with the idea of fair play is
the creation of a level playing field for the business participants of the day.
Trade is one of the early attributes of human activity. The very word
‘trade’ signifies an economic activity that is voluntary and is based on
reciprocity. Starting with the barter system in antiquity, humans began,
when forms of money were invented, to trade in goods for cash. In fact, it
was trade that contributed to the invention of money. As this voluntary
reciprocal economic activity began to grow both geographically and in
volume, it was regulated, initially by the traders themselves and then by the
authorities, such that trade was fair; that it was free from distortions.
Much of human civilization has developed with and around the
expansion of trade and the desire firstly, to survive and subsequently, to
create wealth through trade. Early attempts to regulate trade were designed
to facilitate trade by providing the basic code of conduct for those engaged
in international trade. This code of conduct was developed in due course
under both public and private international law to cater for the growth in
trade and business activities. Accordingly, one of the visions of the new
world order conceived towards the end of World War II was the
liberalization of international trade to stimulate economic growth through
the establishment of an International Trade Organization (‘ITO’).


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TEXTBOOK INTERNATIONAL TRADE AND BUSINESS LAW

Although the ITO never came into existence, its fundamental concept
of the liberalization of international trade was pursued through the GATT
and some other international legal instruments; many of these eventually
became part of the WTO law when this world trade organization was
established in 1995, following the conclusion of the Uruguay Round of
Multilateral Trade Negotiations between 1986 and 1994. There have been a
number of developments within private international law, too, since the end
of World War II. These were designed to facilitate as well as to regulate
international trade and business. Consequently, there is now a considerable
body of public and private international law dealing with international trade
and business, and this Textbook entitled, International Trade and Business
Law, is an attempt to provide a comprehensive yet succinct overview of this
body of law.
The Textbook covers a wide range of topics in International Trade and
Business Law pertaining to both public and private international law. It is
the result of an ambitious project designed to produce a comprehensive tool
of study for Vietnamese students, government officials, lawyers and scholars.
Vietnam adopted a new economic reform policy, known as ‘Doi Moi’,
in order to usher the country along the road to economic liberalization and
economic reform in 1986. As part of that drive, Vietnam made an
application to join the WTO and was in 2007 duly admitted to this world
trade organization. Since the introduction of ‘Doi Moi’ and membership of
the WTO, in particular, Vietnam has witnessed a massive growth in
international trade and business activity, requiring new laws, regulations and
policies to regulate such activities.
Vietnam’s membership of the WTO was a catalyst for a number of
new developments in the legal system of the country, because Vietnam had

to undertake a number of new commitments to join the WTO. Complying
with these commitments required enacting new laws and adopting new
policies. Vietnam’s membership of the WTO has transformed the legal
landscape in the country. Consequently, Vietnam is now not only a fullyfledged member of the WTO; it is also a thriving market economy with a
socialist political system. The country has in the recent past attracted a


PREFACE

11

huge amount of foreign investment and has become one of the world’s
fastest-growing economies. Parallel to such opportunities come the
responsibilities to operate within agreed international rules. There has, for
Vietnam’s success, to be a well-educated or-trained human resource capable
of interacting with other global actors and promoting and protecting the
national interests of the country.
Vietnam’s interaction with the actors in the field of international trade
and business has increased a great deal. The Vietnamese legal system has
responded and is still responding to the challenges stimulated by these
changes in the sphere of international economic and legal activity.
Therefore, there is a need to prepare a new generation of Vietnamese lawyers
and government officials who can understand and handle appropriately the
matters raised by these phenomenal changes taking place nationally and
internationally; they must help the people of the country to maximize the
benefits resulting from these changes. For this, they need good academic
material - and this Textbook on International Trade and Business Law is
designed to meet that need and demand.
It includes chapters authored by both Vietnamese and foreign authors
dealing with both international legal and Vietnamese legal issues pertaining

to both public and private international trade and business law. Such an
inclusive approach provides the students with both international and
Vietnamese perspectives into these areas of law.
The various contributors provide a comprehensive treatment of the
topics selected for inclusion in the Textbook. These range from WTO law,
including the trade in goods and services, and intellectual property
protection, to international commercial dispute resolution, including
international commercial arbitration, regional trading arrangements or
regional economic integration schemes such as NAFTA, EU and ASEAN,
and e-commerce. The chapters are both informative and analytical and are
contributed by academics, practitioners, government officials and researchers
of both older and younger generation most of whom carry a wealth of
expertise and experience in the areas concerned.
Since this Textbook is designed primarily for law students, government


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TEXTBOOK INTERNATIONAL TRADE AND BUSINESS LAW

officials, researchers and lawyers in Vietnam, the approach is obviously a
legalistic one based on the analysis of national and international legal
instruments, case law or jurisprudence and established customs and norms
of behaviour. An attempt has been made to make it as reader- or studentfriendly as possible. All chapters end with a list of questions for reflection
by students and other readers in order to stimulate their thinking and
analysis. Similarly, all chapters provide a list of further reading for those
willing to develop further their understanding of a given area of law.
Although the length and the style of presentation vary from one chapter to
another, as is quite natural for a collection of this nature, consisting as it
does of contributions by many people with their own different legal,

practical and scholarly backgrounds, an attempt has been made to achieve
uniformity and consistency throughout the text in order to present it as a
cohesive Textbook. All in all, it is hoped that this Textbook would prove to
be a valuable academic material and source of reference for those interested
in International Trade and Business Law and in its application and
ramifications in Vietnam.
It has been a pleasure for me to work with the Coordinating
Committee of the Action of the Hanoi Law University (HLU) on this
Textbook and I wish to thank them for their excellent cooperation.
Professor Dr. Surya P. Subedi
DPhil (Oxford); Barrister (England)
Professor of International Law
University of Leeds, UK
Editor


TABLE OF ABBREVIATIONS

13

TABLE OF ABBREVIATIONS
AAA

American Arbitration Association

AANZFTA

ASEAN-Australia-New Zealand Free Trade Area

ABAC

APEC Business Advisory Council

ACFA

Framework Agreement on Comprehensive Economic
Cooperation between ASEAN and China

ACFTA

ASEAN-China Free Trade Area

ACIA

ASEAN Comprehensive Investment Agreement

ACP

African, Caribbean and Pacific Countries

AD

Anti-dumping

ADA

Anti-dumping Agreement

ADR

Alternative Dispute Resolution

AEC

ASEAN Economic Community

AFAS

ASEAN Framework Agreement on Services

AFT

ASEM Fund of Trust

AFTA

ASEAN Free Trade Area

AHTN

ASEAN Harmonized Tariff Nomenclature

AIA

ASEAN Investment Area

AITIG

ASEAN-India Trade in Goods

AJCEP

ASEAN-Japan Comprehensive Economic Partnership

AKAI

ASEAN-Korea Agreement on Investment

AKFA

ASEAN-Korea Framework Agreement on Comprehensive
Economic Cooperation

AKTIG

ASEAN-Korea Trade in Goods Agreement

AKTIS

ASEAN-Korea Trade in Services Agreement


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TEXTBOOK INTERNATIONAL TRADE AND BUSINESS LAW

AMS

Aggregate Measurement of Support

APEC

Asia-Pacific Economic Cooperation

APEC-MRA

Mutual Recognition Agreement within the APEC

ASEAN

Association of South-east Asian Nations

ASEM

Asia-Europe Meetings

ATC

Agreement on Textiles and Clothing

ATIGA

ASEAN Trade in Goods Agreement

BC

Before Christ

BDC

Beneficiary Developing Country

BFTAs

Bilateral Free Trade Agreements

BIT

Bilateral Investment Treaty

BTA

Agreement between the United States of America and the
Socialist Republic of Vietnam on Trade Relations

BTAs

Bilateral Trade Agreements

CAP

Common Agricultural Policy

CDB

Convention on Biodiversity

CEPEA

Comprehensive Economic Partnership in the East Asia

CEPT

Agreement on the Common Effective Preferential Tariff
Scheme for the ASEAN Free Trade Area

CFI

Court of First Instance

CFR

Cost and Freight (formerly known as C&F)

CIETAC

Chinese International Economic and Trade Arbitration
Commission

CIF

Cost, Insurance and Freight

CIP

Carriage and Insurance Paid to

CISG

United Nations Convention on Contracts for International

Sales of Goods 1980; or Vienna Convention 1980

CJ

Court of Justice (formerly known as ECJ - European Court
of Justice)

CJEU

Court of Justice of the European Union

CLMV

Cambodia, Laos, Myanmar and Vietnam


TABLE OF ABBREVIATIONS

15

CM

Common Market

COMESA

Common Market of Eastern and Southern Africa

CPC

United Nations Central Product Classification

CPT

Carriage Paid to

CTG

Council for Trade in Goods

CTS

Council for Trade in Services

CU

Customs Union

CVA

WTO’s Agreement on Customs Valuation

DAP

Delivered at Place

DAT

Delivered at Terminal

DCs

Developing Countries

DDP

Delivered Duty Paid

DSB

WTO’s Dispute Settlement Body

DSU

WTO’s Dispute Settlement Understanding

EAFTA

East Asia Free Trade Area

EC

European Communities; or European Commission

ECB

European Central Bank

ECJ

European Court of Justice (it is now CJ - Court of Justice)

ECSC

European Coal and Steel Community

EDI

Electronic Data Interchange

EEC

European Economic Community

EFTA

European Free Trade Association

EMU

Economic and Monetary Union

EP

Export Price

EPAs

Economic Partnership Agreements

EU

European Union

EURATOM

European Atomic Energy Community

EXW

Ex Works

FAS

Free Alongside Ship

FCA

Free Carrier


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TEXTBOOK INTERNATIONAL TRADE AND BUSINESS LAW

FDI

Foreign Direct Investment

FIOFA

Federation of Oils, Seeds and Fats Association

FOB

Free on Board

FOR

Free on Rail

FOT

Free on Truck

FPI

Foreign Portfolio Investment

FSIA

US Foreign Sovereign Immunities Act of 1976

FTAs

Free Trade Agreements

GAFTA

Grain and Feed Trade Association

GATS

WTO General Agreement on Trade in Services

GATT

WTO General Agreement on Tariffs and Trade

GCC

Gulf Cooperation Council

GSP

Generalized System of Preferences

HFCS

High Fructose Corn Sweetener

IACAC

Inter-American Commercial Arbitration Commission

IAP

Individual Action Plan

IBRD

International Bank for Reconstruction and Development

ICA

International Commercial Arbitration

ICC

International Chamber of Commerce

ICDR

International Centre for Dispute Resolution

ICJ

International Court of Justice

ICSID

World Bank’s International Centre for the Settlement of
Investment Disputes

IEG

Investment Experts Group

IGA

ASEAN Agreement for the Promotion and Protection of
Investments

IL

Inclusion List

ILO

International Labour Organization

ILP

WTO Agreement on Import Licensing Procedures

IMF

International Monetary Fund

INCOTERMS International Commercial Terms


TABLE OF ABBREVIATIONS

17

IPAP

Investment Promotion Action Plan

IPRs

Intellectual Property Rights

ISBP

International Standard Banking Practice

ISP

Rules on International Standby Credit Practices

ITO

International Trade Organization

LCIA

London Court of International Arbitration

LDCs

Least-developed Countries

LMAA

London Maritime Arbitration Association

LME

London Metal Exchange

MA

Market Access

M&A

Merger and Acquisition

MAC

Maritime Arbitration Commission

MERCOSUR

Southern Common Market (‘Mercado Común del Sur’ in
Spanish)

MFN

Most Favoured Nation

MMPA

Marine Mammal Protection Act

MNCs

Multinational Corporations

MTO

Multimodal Transport Operators

MUTRAP

EU-Viet Nam Multilateral Trade Assistance Project
funded by the EU

NAALC

North American Agreement on Labour Cooperation

NAFTA

North American Free Trade Area

NGOs

Nongovernmental Organizations

NME

Nonmarket Economy

NT

National Treatment

NTBs

Nontariff Barriers

NTR

Normal Trade Relations

NV

Normal Value

PCA

Partnership and Cooperation Agreement

PECL

Principles of European Contract Law

PICC

UNIDROIT Principles of International Commercial Contracts


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TEXTBOOK INTERNATIONAL TRADE AND BUSINESS LAW

PNTR

Permanent Normal Trade Relation

PPM

Process and Production Method

PSI

WTO Agreement on Preshipment Inspection

PTAs

Preferential Trade Arrangements

ROK

Republic of Korea

RoO

WTO Agreement on Rules of Origin

RTAs

Regional Trade Agreements

S&D

Special and Differential Treatment

SA

WTO Agreement on Safeguard

SAA

Statement of Administrative Action

SCC

Stockholm Chamber of Commerce

SCM

WTO Agreement on Subsidies and Countervailing Measures

SMEs

Small and Medium-sized Enterprises

SMEWG

APEC’s Small and Medium-sized Enterprise Working Group

SOMs

Senior Officials Meetings

SPS

WTO Agreement on the Application of Sanitary and
Phytosanitary Measures

SSG

Special Safeguard

TBT

WTO Agreement on Technical Barriers to Trade

TEC

Treaty of the European Communities

TEL

Temporary Exclusion List

TEU

Treaty of the European Union

TFAP

Trade Facilitation Action Plan

TFEU

Treaty of Functioning of the European Union

TIFA

Trade and Investment Framework Agreement

TIG

Trade In Goods

TNC

Trade Negotiations Committee; or Transnational Coorporations

TPP

Transpacific Economic Strategic Partnership Agreement

TPRB

WTO Trade Policy Review Body

TPRM

WTO Agreement on Trade Policy Review Mechanism


TABLE OF ABBREVIATIONS

19

TRIMs

WTO Agreement on Trade-related Investment Measures

TRIPS

WTO Agreement on Trade-related Intellectual Property Rights

TRQs

Tariff-rate Quotas

UCC

US Uniform Commercial Code

UCP

ICC Uniform Customs and Practice for Documentary Credits

UNCITRAL

United Nations Commission for International Trade Law

UNIDROIT

International Institute for Unification of Private Law

URDG

Uniform Rules for Demand Guarantees

USDOC

US Department of Commerce

WCO

World Customs Organization

WIPO

World Intellectual Property Organization

WTO

World Trade Organization


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TEXTBOOK INTERNATIONAL TRADE AND BUSINESS LAW

CONTENTS
Textbook
INTERNATIONAL TRADE AND BUSINESS LAW
List of Authors
Introduction for the second publication
Foreword

Preface
Table of Abbreviations

Page
3
5
6
8
13

INTRODUCTORY PART

23

Chapter One. General Introduction
Section One. International Trade and Business and Related
Transactions
Section Two. Sources of the International Trade and Business Law
Summary of the Chapter One
Questions/Exercises
Required/Suggested/Further Readings

23
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PART ONE: INTERNATIONAL TRADE LAW

53

Chapter Two. Law of the WTO

Section One. Introduction
Section Two. Some Basic Principles of the WTO and
Exceptions
Section Three. Trade in Goods and the WTO’s Agreements
Section Four. Trade in Services and the GATS
Section Five. Intellectual Property Rights and the TRIPS Agreement

53
53
67

38
50
51
51

115
145
163


CONTENTS

21

Section Six. WTO’s Dispute Settlement Mechanism
Section Seven. Some New Issues of the WTO
Section Eight. Vietnam and the WTO’s Accession Commitments
Summary of the Chapter Two
Questions/Exercises

Required/Suggested/Further Readings

186
198
212
225
225
224

Chapter Three. Rules on the Regional Economic Integration
Section One. Introduction
Section Two. EU Internal Market Regulations
Section Three. North American Free Trade Agreement (NAFTA)
Section Four. Rules on ASEAN’s Economic Integration
Section Five. Vietnam and the Regional Economic Integration
Summary of the Chapter Three
Questions/Exercises
Required/Suggested/Further Readings

229
229
237
259
278
289
302
303
303

Chapter Four. Agreements on Bilateral Trade Cooperation between

Vietnam and Some Partners
Section One. Vietnam-European Union
Section Two. Vietnam-United States
Section Three. Vietnam-China
Summary of the Chapter Four
Questions/Exercises
Required/Suggested/Further Readings

305
305
317
327
337
337
340

PART TWO: INTERNATIONAL BUSINESS LAW

341

Chapter Five. Rules Governing International Sales of Goods
Section One. Introduction
Section Two. International Commercial Terms - INCOTERMS
Section Three. Rules on International Sales of Goods Contracts
Section Four. Methods of Financing of International Sales of Goods
Summary of the Chapter Five
Questions/Exercises
Required/Suggested/Further Readings

341

341
351
354
386
412
413
415


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TEXTBOOK INTERNATIONAL TRADE AND BUSINESS LAW

Chapter Six. Rules Governing Some Other International Business
Transactions - Overview
Section One. Rules Governing International Franchising - Overview
Section Two. Rules Governing International Logistics - Overview
Section Three. Rules on E-Commerce for International
Business Transactions - Overview
Summary of the Chapter Six
Questions/Exercises
Required/Suggested/Further Readings
Chapter Seven. International Commercial Dispute Settlement
Section One. Introduction
Section Two. Modes of the Dispute Resolution - The Choice
Section Three. Choice of Laws and Jurisdictions for the
Dispute Settlement
Section Four. Recognition and Enforcement of the Foreign
Arbitration’s Awards
Section Five. Recognition and Enforcement of the Foreign

Court’s Judgments
Section Six. Vietnamese Rules Governing International
Commercial Dispute Settlement
Summary of the Chapter Seven
Questions/Exercises
Required/Suggested/Further Readings

417
417
434
449
461
461
462
463
463
467
492
506
511
515
523
524
525


CHAPTER ONE. GENERAL INTRODUCTION

23

INTRODUCTORY PART (*)
CHAPTER ONE
GENERAL INTRODUCTION

Section One. INTERNATIONAL TRADE AND BUSINESS AND RELATED
TRANSACTIONS
1. Historical Development of International Trade and Business Transactions
International trade and business transactions and the law governing these are
not a new phenomenon. According to historians, since humans first lived in
tribal societies, they have known how to exchange goods. The prehistoric
equivalent of fairs existed in the boundary areas between tribal territories.
The first international trade network discovered by archæologists appeared
in approximately 3,500 BC in the ancient Mesopotamia (modern-day Iran
and Iraq). Mention must also be made of the trade networks existing in
China during 1,000-2,000 BC, the ‘Silk Road’. Before Greek civilization,
the Mediterranean Sea was an international trade centre very successfully
organized by Phoenicia. Greek city-states started to compete with Phoenicia
from 800 BC onwards in a growing trade network alongside their developing
civilization. Alexander the Great’s Conquest created trade paths extending
to Asia and the Mediterranean Sea. Later, the Romans built a vast Empire
with trade expanding to include what is nowadays the United Kingdom
(hereinafter the ‘UK’) and Northern Europe.
(*)

The Introductory Part was written by Nguyen Thanh Tam (Ms), Dr., Lecturer, Head of the
International Trade and Business Law Department of the Hanoi Law University (HLU) and Trinh
Hai Yen (Ms), LLM, Doctoral Candidate of the National University of Singapore (NUS), Lecturer
of the Diplomatic Academy of Vietnam (DAV).

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TEXTBOOK INTERNATIONAL TRADE AND BUSINESS LAW

International trade in Europe in the pre-mediæval period experienced
a depression arising from the collapse of the Roman Empire. Later, during
the Middle Ages, Arabian merchants continued the tradition of international
trade, creating broad trade networks around the Persian Gulf, Africa, India
and South-east Asia. In that period, the international trade between China
and India, Malaysia and South-east Asia also developed.
Seasonal fairs were created in the European cities in the Middle
Ages. These were places where merchants brought goods from different
countries for sale. Since then, emperors, such as the Emperor of Lombardy
(Italy) in the eleventh century, had the policy of imposing a sales tax
applicable in fairs and tariffs on goods transported to fairs.
During the late Middle Ages, the regional trade networks had
developed considerably in Europe, such as the region along the coast of
Mediterranean Sea, Venice, Florence, Genoa, and northern Africa. In
northern Europe, in the mid-fourteenth century, approximately eighty
trading cities and their merchants joined to create a flexible political union,
the Hanseatic League; they had their own common commercial rules and
enough military and political power to counter any invasions by emperors or
other invaders. In that period, emperors and other heads of state began to
conclude treaties aimed at the protection of commercial interests, and the
application of a tariff policy in favour of their merchants.
In the late fifteenth century, when Christopher Colombus discovered
America, and science, technical progress and maritime development opened
the era to the conquering of world trade by Europeans. Then the European
states created a worldwide colonial network. The task of their respective
colonies was the provision of the raw materials for their European cities and

manufacturing bases. The cities produced the completed products then
colonies imported the finished goods produced by European centres.
A new international economic order began to appear when the World
War II was coming to an end. At the Bretton Woods Conference of 1944, the
global economic organizations the International Monetary Fund (hereinafter
the ‘IMF’) and the International Bank for Reconstruction and Development
(hereinafter the ‘IBRD’) were born. A global trade organization also
appeared in the Havana Conference of 1948, i.e., the International Trade
Organization (hereinafter the ‘ITO’). However, the ITO failed to survive; it


CHAPTER ONE. GENERAL INTRODUCTION

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was replaced by a ‘provisional’ mechanism governing international trade in
goods, i.e., the General Agreement on Tariffs and Trade 1947 (hereinafter the
‘GATT 1947’). This ‘provisional’ Agreement governed the global trade in
goods for nearly 50 years, until the creation of the World Trade Organization
(hereinafter the ‘WTO’) in 1995 (see Chapter Two of the Textbook).
Since the end of World War II, the global trade system, which has
continuously developed over more than 65 years, is now standing in the
multi-route crossroads. Where the WTO will head, together with global
commitments to the liberalization of trade in goods; trade in services;
protection and enforcement of intellectual property rights (hereinafter the ‘IPRs’),
and international investment issues, among other issues, remains to be
concluded. To overcome the relative ineffectiveness of the commitments to
the liberalization of global trade, regional economic integration is now
becoming the most appropriate foreign trade policy planned by most states.
The models of regional economic integration, such as the European Union

(hereinafter the ‘EU’), the North American Free Trade Area (hereinafter the
‘NAFTA’), and ASEAN Free Trade Area (hereinafter the ‘AFTA’), to name
but a few, have became familiar topics in many basic textbooks and
casebooks of international trade law (see Chapter Three of the Textbook).
Bilateral trade agreements (hereinafter the ‘BTAs’) will also play an
important role (see Chapter Four of the Textbook).
2. Relative Distinctions between International Trade Involving Mainly
States and Public Entities, and International Business Transactions
Involving Mainly Traders
A. International Trade and Trade Policy
1. Why Do States Trade?
There are two main reasons advanced for why states trade with each other,
such as (a) economic reason; and (b) political reason.
(a) Economic reasons
Free trade is not a new idea. It exists in different economic theories since between the fifteenth and the eighteenth centuries in Europe, such as
mercantilism, Adam Smith’s absolute advantage theory, and the Ricardian
comparative advantage theory, among others.