Vietnamese firms need to focus on transformation to adapt to the EU’s green and sustainable development requirements, leveraging trade-investment potential between the sides, advised experts at a Vietnam-EU business forum in Ho Chi Minh City on November 27. 

Director General Ta Hoang Linh of the Ministry of Industry and Trade’s European-American Market Department said after the pandemic and ongoing political instabilities accelerating the supply chain shift, many global partners, including the EU, are actively diversifying their supply sources and choosing Vietnam as a strategic destination in the Indian Ocean-Pacific.

The EU is currently the third-largest export market and the fifth-largest import market of Vietnam. Meanwhile, Vietnam has surpassed Singapore to become the largest trade partner of the EU in ASEAN and ranks 11th among the biggest commodity suppliers to the bloc. 

According to customs statistics, two-way trade was valued at USD 62.24 billion USD last year, up 9.2% year-on-year, with Vietnam's exports to the EU reaching 46.82 billion USD, an annual rise of 16.7%. In the third quarter of 2023, bilateral trade turnover stood at 15.12 billion USD, down 1.5% year-on-year. However, this decline is considered temporary, as the slowdown has significantly eased and the EU's economy is gradually recovering.

Linh added that the EU-Vietnam Free Trade Agreement (EVFTA) has effectively supported the sides’ goods in accessing each other's markets, meeting their diversification needs.

President of EuroCham Vietnam Gabor Fluit stressed that Vietnam's strong commitment to the EU standards in sustainability will be a key driver attracting FDI, particularly from Europe.

Compliance with new market regulations from the bloc, especially the Carbon Border Adjustment Mechanism (CBAM) and the Corporate Sustainability Due Diligence Directive (CSDDD), requires significant investment from Vietnam in modernising infrastructure, advancing green technology, and developing human resources, he noted.

Nguyen Quoc Khanh, CEO of Research and Development at Vinamilk, shared that the Vietnamese dairy firm has long implemented a circular economy model, taking it as essential. In the near future, not only Europe but most of the global markets will demand products to meet green and sustainable standards, and companies failing to comply will struggle to compete. 

Investment issues are the main challenge for most of the businesses in the green production transition. However, it can be said that the benefits gained will outweigh the costs of conversion, Khanh said./.

Source: Vietnam Plus 

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