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Exporting sustainably to the EU, businesses must be "green"

27/09/2023    171

Since the third year of the EVFTA implementation roadmap, the advantages have been somewhat affected, because the EU is applying more high standards, increasing quality requirements, especially in the fields of environment and development. sustainable development... with imported goods.

EU standards are increasingly high

At the seminar "Green transformation - Urgent requirements of businesses exporting to the EU" organized by Industry and Trade Magazine, on September 19, Mr. Ngo Chung Khanh, Deputy Director, Department of Multilateral Trade Policy ( Ministry of Industry and Trade) said that in the EVFTA Agreement, there is a chapter called Sustainable Development. The issue of sustainable development in EVFTA addresses two areas, one is the environment and the other is labor.

Regarding the environment, the EVFTA mentions four main aspects including: climate change, biodiversity, sustainable forest management and forest product trade and development management, conservation of marine life and aquaculture. Seafood.

According to Mr. Ngo Chung Khanh, in terms of enforcement mechanism, EVFTA is not a normal trade agreement but an agreement with very important elements of sustainable development. “EVFTA is an agreement that focuses heavily on sustainable development, so businesses that want to export to the EU sustainably need to pay attention to sustainable development, environmental issues, and labor protection", Mr. Ngo Chung Khanh said.

EVFTA is also the first agreement to have a fairly clear enforcement mechanism. The two sides agreed to establish a Committee on Sustainable Development and have representatives of the Government and management agencies of the two sides meet annually or periodically to review the implementation progress of both sides, it outlines experiences as well as issues that need to be addressed.

In addition, the EU will have regulations on environmental issues or labor issues. Such as the Carbon Border Adjustment Mechanism (CBAM), or regulations related to anti-deforestation and the upcoming supply chain act. Accordingly, normal regulations usually do not target exporters but mainly importers, i.e. EU entities and EU entities will have to take responsibility for managing their supply chains to ensure the requirements set by the EU.

At the same time, Mr. Ngo Chung Khanh also emphasized consumer trends in the EU market. Nowadays, consumers are increasingly interested in the way we make products, whether the products affect the environment, they are sustainable or not, how do we treat workers? We need to look at both sides, from the EU regulations side and from the consumers themselves.

Ms. Nguyen Hong Loan, Technical Support Project Expert on CBAM's impact assessment, further analyzed that the EU market is inherently a market with very high environmental standards and EU regulations for agricultural products. Domestic products related to the environment have been regulated very early since 1987. However, these regulations have been regulated more strictly and accelerated, starting with the EU's approval of the Green Agreement. with a target of reducing greenhouse gas emissions by 55% by 2030 compared to 1990 and working towards the very ambitious target of achieving net zero emissions by 2050.

“Along with this regulation they make different, comprehensive proposals in all fields to ensure the achievement of this goal and cover all fields from agriculture, forestry, fisheries, transportation, aviation and these regulations, when applied to European goods, it will also affect the entire supply chain for products exported to Europe like Vietnam," Ms. Nguyen Hong Loan said.

In particular, the recent regulation approved in May 2003 and officially effective from October 1 this year is the EU Carbon Border Adjustment Mechanism, which has introduced EU carbon pricing to apply to products export. However, the EU also offers a transition roadmap from now to 2026 and the rate at which we have to pay for CBAM certificates will also gradually increase from 2026 to 2034.

According to Ms. Nguyen Hong Loan, European green standards are being applied more widely and deeply. For businesses, previously these standards could be applied very sporadically and were voluntary, now when Vietnamese businesses export to Europe, they will have to be more mandatory.

Don't “let grass grow under your feet"

Analyzing the same issue of green transformation, Ms. Nguyen Thi Thu Trang, Director of the Center for WTO and Integration, Vietnam Confederation of Commerce and Industry (VCCI) said, certainly the green or sustainable standards of The EU will cover almost all products that are considered our strengths when exported to the EU market. Such as agricultural and aquatic products, furniture, textiles, footwear... So certainly the number and scope of Vietnam's businesses and exported goods affected is large.

This is also a challenge for businesses, because these standards are not set and then complied with and that's it, but are a series of gradual, sustainable "green" changes. That means, if businesses want to comply, they must regularly monitor to ensure compliance.

"This year our exported goods may comply, but next year we may not comply with green and sustainable requirements anymore, because the requirements have already been increased according to the roadmap," Ms. Nguyen Thi Thu The analysis page also emphasized that adapting to standards requires great effort, awareness and cost from businesses.

Ms. Nguyen Thi Thu Trang informed that a survey last August showed that Vietnamese businesses have begun to pay attention to this issue. Nearly 70% of businesses surveyed knew about the EU's Farm-to-Fork Program in its green strategy applied to agricultural and food products; Nearly 80% of relevant businesses know about EU anti-deforestation laws; Textile strategy is known to nearly 60% of surveyed businesses. Regarding CBAM, the percentage of businesses interested is less, because currently the EU is limited to 6 product types, most of which are not Vietnam's strong export products.

“The regulations do not have to be applied immediately according to the roadmap. This is the basis from knowing to taking action and having preparation. We shouldn't worry too much, but we also shouldn't do nothing," Ms. Nguyen Thi Thu Trang said.

Source: Custom News