Vietnam has been highly praised by partners for its efforts in green development and energy transition. The EU is one of the partners that Vietnam has been closely cooperating with in these fields.
Nguyen Van Thao, Vietnamese Ambassador to Belgium and Luxembourg, and head of the Vietnamese Delegation to the European Union (EU), said the EU is a large market with 150 million people and GDP of $16 trillion. It has high demand for consumer and essential goods, of which Vietnam has great advantages.
Enterprises in the EU use high source technologies, have powerful financial resources, good governance skills, and always take the lead in green development.
Meanwhile, Vietnam is one of four Asian countries (the others are Japan, South Korea and Singapore) that have free trade agreements (FTAs) with the EU (EVFTA). The EU has demand for diversifying supply sources to disperse risks after Covid-19 and the Ukraine-Russia conflict.
In 2022, Vietnam-EU trade turnover reached $64 billion, of which Vietnam’s exports to the EU were worth $54 billion. The EU market with 27 members is a vast market which can bring high surplus value.
The EU is the location for most diplomatic representative agencies, and the relations between EU’s member countries and Vietnam are very good, which is also a great advantage for Vietnam.
However, Thao reminded that “the path is not absolutely rosy”, meaning that it is not easy to export products to the vast market, because the EU sets high requirements and new standards on products and is always choosy. Besides, there are many regulations exporters have to observe to be able to export products to the market.
The long geographical distance between Vietnam and the EU also requires high transportation costs which may weaken the competitiveness of Vietnamese products.
Since many Vietnamese products still cannot meet the standards set by the EU, Vietnam’s exports to the market just account for 1.7 percent of the total 3 trillion euros worth of products the EU imports every year.
Thao said that Vietnamese awareness about the EU market remains limited.
“We can see the attention paid by Vietnamese enterprises to the European market, but their determination is not really strong,” Thao said.
This is why the EVFTA still cannot be fully exploited by Vietnamese enterprises. While other countries are struggling to negotiate with the EU for FTAs, Vietnam has a
ready obtained an FTA with the vast market, but still cannot take full advantage of the agreement, which is a big waste of resources.
With the EVFTA, economists said “the expressway has been opened to Vietnamese products’”, meaning that Vietnamese enterprises have very favorable conditions to boost exports to the EU as 90 percent of export items can enjoy tax exemption.
This is an outstanding advantage of Vietnam over other countries, especially those that have the same export products as Vietnam.
The EU has recently released regulations on cross-border carbon emissions, anti-deforestation, and accountability.
The regulations, Vietnamese enterprises say, post obstacles for them. However, they need to understand that these regulations are applied to all exporters, not only Vietnam, and that green development is a trend in the world, and Vietnam must not stay outside the movement.
According to Thao, if Vietnam can adapt to the new conditions and proceed on the path of green transition, it will have dual advantages when having both EVFTA and green development. If not, it will lag behind and will not be able to exploit the advantages brought by EVFTA.
Vietnam surprised the world with its strong commitment about zero emissions by 2050 at COP26. To implement its commitment, just one year later, Vietnam established a national secretariat and created a number of national voluntary contribution programs.
In December 2022, when attending the ASEAN-EU Summit, Prime Minister Pham Minh Chinh made a political declaration on the Just Energy Transition Partnership (JETP). And at COP28, Chinh announced a plan on mobilizing resources for JETP implementation.
The actions have been highly praised by partners, especially the EU, which commented that Vietnam not only made the commitment but is also on the right track to implement the commitment.
Tran Thuong
