European Union (EU27) is Vietnam’s third largest export market with continuous turnover growth over the years and is the partner with high trade surplus for Vietnam. Given the fact that EU – Vietnam Free Trade Agreement (EVFTA) entered into force on 1st August 2020, prospects of goods exporting to the EU market shall be even brighter.

In theory, European Green Deal covers all economic sectors in the EU, thus, in the long run, all Vietnam’s exported products shall be impacted by EU green policies in various levels, as per the roadmap and in different ways.

As a comprehensive and long-term policy package, the European Green Deal and its policies, implementing actions are not only numerous in number and complex in nature (multiple layers of rules, many binding levels, interlinked sectors, aspects) but also continuously evolving (including new roadmap and situation revision). Therefore, it is required that Vietnam’s businesses and regulatory authorities should have right, correct and regularly updated awareness of related green policies in response to European Green Deal.

For Vietnam’s exports, EU is a developed market with high standards in almost all aspects. Thus, compared with many other markets, EU has always been the market where businesses face a lot of challenges in meeting TBT, SPS requirements for market access.

Complying with new or upgraded standards of green policies often requires manufacturers, exporters to bear compliance fees that they would not have to pay if these (new) standards do not arise. Therefore, it is obvious that green policies may increase production costs and negatively affect the cost of producing, exporting relevant goods and businesses’ competitiveness.

European Green Deal is posing great challenges to Vietnamese manufacturers and exporters of green transition, especially in the coming time.

The EU until now has not yet been the big market for Vietnam’s exports of agricultural and food products, however, it is a considerable potential market, especially in the segment of high-value and organic products in the context that Vietnam’s exports of agricultural and food products have tariff advantages in EU-Vietnam Free Trade Agreement (EVFTA).

Agricultural and food products are consuming factors causing environment pollution and degradation of natural resources in the EU. Thus, during enforcement of European Green Deal, the EU has been adopting many specific green policies relating to this product group (both direct and indirect).

The “Farm to Fork” Strategy, adopted on 20 May 2020 is the EU’s key program to enforce the targets of building a fair, healthy and environmentally-friendly food system in the European Green Deal.

From the overall picture of policies within the European Green Deal framework, it can be seen that Vietnam’s production, export of agricultural and food products are facing considerable challenges from the green trend in this market.