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.

Given a series of newly added or upgraded green standards under specific targets of  European Green Deal in various sectors (only mandatory/minimum standards/requirements), many kinds of Vietnam’s exported goods face the requirements for complying new standards that are either higher than the previous ones, or even under higher, stricter roadmap in the future.

Depending on the kind of standards, sectors and capability of Vietnamese manufacturers and exporters, challenges of meeting new green standards which are currently in place or will be effective in the EU are not the same. However, overall, EU green standards require businesses to overcome specific challenges relating to:

-  Technology capacity: Several green standards for products require the change, update of technology in production to launch products that meet new requirements or existing ones but at higher, stricter levels than before. Even in some cases, technology needs to be ready for updating new levels of one standard in the implementation roadmap for each period (for example: stricter rules toward the gradual phase-out of some kinds of pesticides, hazardous chemicals, microplastics, etc.);

- Capacity to control the production chains: Some standards sticking to the whole product life cycle (i.e. eco-design) of the whole chain (i.e. standards of antibiotics dosage, pesticide residues in food, etc.) require businesses to revise, supplement or newly set up procedures for controlling production chain to ensure respective quality standards;

- Labor capacity: Some standards directly set new requirements for methods of implementing labor process of production (i.e. animal welfare standards) or indirectly require for improving labor capacity (for adaption to new technologies implemented to comply with new higher standards), which then forces businesses to train, re-train their labor to meet these standards;

- Capacity for accountability, report or information tracking: Some new legislative measures, requirements relating to accountability of green practice in production and sale process (for example: requirements for declaring carbon emissions per product unit, accountability requirement for origin of land used for farming, requirements for information of green factors in the products to consumers, etc.) request businesses to change, update their controlling, tracking, filing system as well as methods, process of reporting, providing, describing information of related products.

In practice, not many Vietnamese businesses (including FDI companies) possess the capacity for immediately transforming and meeting all capacity areas as mentioned above due to numerous reasons:

- Subjectively, many changes require considerable compliance fees (for human resources, material resources, time) that cannot be affordable to all businesses (especially small and micro-sized enterprises);

- Objectively, in many cases, the adjustment needs the cooperation of numerous actors in production chains that could not be completed by only 1 enterprise, manufacturer, or exporter alone. In some other cases, detailed guidance for implementing some procedures, processes is even being drafted by EU authorities.

However, with good preparation, it is still feasible for the majority of businesses to meet green requirements. Specifically, with the principles of transparency and ensuring “no one is left behind”, green policies in European Green Deal are designed for:

- Long consultation and publication time: All measures, especially mandatory rules are to be publicly consulted a long time before being officially adopted/approved. Even principles – the basis for drafting and adopting these regulations – which are clearly mentioned in Strategy, Action Plan, Programme, have been presented and/or approved long time before;

- Step-by-step implementation roadmap: All new green measures, policies, especially mandatory ones in European Green Deal framework are designed in step-by-step implementation roadmap, in which obligations would be fully enforced at the end of the roadmap (i.e: CBAM). For individual cases which are not suitable for breakdown into multiple-step roadmap would also have long time from entering into force to officially being implemented (EUDR).

Table – Some examples of adopted and effective time of some EU’s policies

Policies	Announcement date of principle policies	Announcement date of draft regulation	Official approval date	Obligation enforcement commencement date	Ful obligations enforcement date
EU Deforestation-Free Products Regulation (EUDR)	20/05/2020 (EU biodiversity Strategy for 2030)	17/11/2021	31/05/2023	29/06/2023	30/06/2025
Carbon Border Adjustment Mechanism  (CBAM)	14/07/2021 (Fit for 55 Package)	14/07/2021	16/05/2023	01/10/2023	01/01/2034
Regulation on the sustainable use of plant protection products	20/05/2020 (Farm to Fork Strategy )	22/06/2022	Not available	Not available	Not available
Regulations on eco-design for sustainable products	11/03/2020 (Circular economy strategy)	30/03/2022	Not available	Not available	Not available
Green Claims Directive	11/03/2020 (Circular Economy Plan)	22/03/2023	Not available	Not available	Not available

Source: Summary VCCI Research Group

Given the abovementioned advantages and disadvantages, to overcome challenges of compliance capacity, manufacturers, exporters of related products to the market are recommended to: 

- Regular monitor and update green policies, legislation trends relating to their products to equip themselves with a clear and accurate vision of green standard trends in the future, and then to have appropriate and timely preparation which is not necessarily too early (costly, waste, affecting the products’ price and competitiveness) but not too late (may lose their capacity for market access when the regulations enter into full force); 

- Thorough, accurate and full study on related specific green requirements, from which to prepare and respond appropriately, accurately, effectively and cost-saving as per the roadmap;

- For the long term, having plans, roadmap suitable to their capacity toward green manufacturing process, from which to be compatible to general trends of exporting market and if necessary, only need for little adjustments to meet new requirements when they are fully in force.

From the perspective of Government agencies, business associations with functions of managing, supporting businesses for export-import, their active engagements at macro level will be considerably effective to support businesses to overcome the challenges of the capacity in implementing EU green standards, especially relating to:

- Providing timely, accurate and detailed information on the progress relating EU green policies, especially information which are handled, analyised by products/sectors; from which businesses can access immediately specific information they need;

- Discussing, working and consulting with EU agencies in charge of implementing specific green policies to (i) clarify technical requirements, detailed standards, specific methods of implementation/adoption, specific guidelines in each scenario; (ii) share the status, differences of policies, actual situations in Vietnam relating to the enforcement of EU green requirements (especially reporting, accountability, etc.), from which to find appropriate policy solutions if possible; (iii) seek the technical support from EU for guiding relevant business actors in Vietnam to adapt to new standards;

- Setting up contact points for providing information, advising and supporting manufacturers, exporters about EU green policies in areas, aspects in charge.

Source: Report "EU Green Deal and Vietnam's Exports - The case of the agricultural, food and textile industries" – Center for WTO and International Trade

• Ways of European Green Deal’s impacts on Vietnam’s exports
• EU Green Deal and Vietnam's export: Impacted sectors
• EU Green Deal and Vietnam's export: Challenges of awareness change and enhancement
• EU Green Deal and Vietnam's export: Challenge in the capacity of paying compliance fees