The potential for growth therefore remains very large, but this comes with increasingly stringent requirements, especially in the context of the EU's strong shift towards a green and sustainable development model.

Record trade surplus, but still plenty of room for growth.

After 5 years of implementing the EVFTA, tariff preferences have become a significant driving force for Viet Nam's exports to the EU. According to the Ministry of Industry and Trade , by 2025, the total two-way trade turnover between Viet Nam and the 27 EU member states will reach approximately US$74 billion. Of this, Viet Nam's exports to the EU will reach US$56.2 billion, an increase of 8.6% compared to the previous year; imports from the EU will reach US$17.6 billion, an increase of 5.4%.

The trade balance continues to strongly favor Viet Nam, with a record trade surplus of $38.6 billion, an increase of over 10% compared to 2024. This is the highest figure ever in trade relations between Viet Nam and the EU, demonstrating the clear growth of Vietnamese goods in this market.

Many key product groups have effectively utilized the EVFTA to expand their market share in the EU, such as electronics, textiles, footwear, iron and steel, agricultural products, and seafood. Viet Nam is also one of the few ASEAN countries with a bilateral free trade agreement with the EU, creating a clear advantage in terms of tariffs and competitiveness compared to many competitors in the region.

According to Mr. Ngo Chung Khanh, Deputy Director of the Multilateral Trade Policy Department (Ministry of Industry and Trade), by the end of the seventh year (2027) of EVFTA implementation, the EU will eliminate almost all tariffs on Vietnamese goods. The 0% tariff rate gives Vietnamese goods a significant price advantage, especially in the context of EU consumers facing inflationary pressures and rising living costs.

More importantly, after 5 years of implementing the EVFTA, many Vietnamese businesses have become familiar with market practices and regulations, and have built stable partner networks. This is a valuable asset that will help businesses move faster in the coming period.

The major challenge from the requirements of sustainable development

However, experts agree that tariff advantages are not a long-term advantage. Alongside the EVFTA, the EU is accelerating negotiations and signing FTAs ​​with many other partners. More importantly, the EU market is shifting strongly towards green, clean, and responsible consumption. With the European Green Deal, EU countries aim to become carbon-neutral economies by 2050. New regulations on deforestation, carbon emissions, circular economy, eco-design, etc., are gradually becoming mandatory rules of the game for imported goods.

According to a report by the European Chamber of Commerce in Viet Nam (Eurocham), one of the biggest challenges in implementing the EVFTA agreement is the Rules of Origin – a key factor for businesses to access tariff preferences. While playing a strategic role in promoting fair and transparent trade, meeting all origin criteria is not simple in practice. Complex documentation procedures, coupled with fragmented supply chains, are making it difficult for many Vietnamese businesses to prove valid origin.

A new and challenging hurdle is the Carbon Border Adjustment Mechanism (CBAM). During the transition period from 2023 to 2025, the CBAM only required businesses exporting to the EU to periodically report on greenhouse gas emissions associated with their exports. However, from January 1, 2026, this mechanism will be fully implemented. If importers cannot demonstrate that their greenhouse gas emissions are within permissible limits, they will be required to purchase CBAM certificates to offset the excess carbon emissions. The price of CBAM certificates will be calculated based on the average weekly closing price of emission quotas within the EU Emissions Trading System (EU ETS).

Therefore, carbon emissions will become a cost directly impacting the price and competitiveness of Vietnamese goods in the European market. Initially, sectors with high emission intensity will be directly affected, including iron and steel, cement, aluminum, fertilizers, electricity, and hydrogen. However, it is likely that the scope of goods subject to CBAM will expand in the coming years.

Beyond CBAM, the EU is also simultaneously implementing new policy frameworks on transparency and accountability for sustainable development, such as the Corporate Sustainability Reporting Directive (CSRD) and the Value Chain Accountability Directive (CSDDD). According to the roadmap, from 2027, these regulations will apply to large EU corporations and have a strong ripple effect on businesses outside the bloc through their supply chains. This places significant pressure on Vietnamese suppliers if they do not proactively improve their capacity to measure, report, and manage emissions data.

According to many experts, for Vietnamese businesses, building a green development strategy is essential to meet stringent environmental standards, not only in the European market but also in many other demanding markets. The stringent regulations of import markets also present an opportunity to transform growth models, enhance brand reputation, and attract partners with long-term value.

To promote trade growth with the EU, the Prime Minister has just issued Decision No. 126/QD-TTg designating focal agencies to implement the Free Trade Agreement between the Socialist Republic of Viet Nam and the European Union (EVFTA). Accordingly, the Ministry of Industry and Trade is the focal agency, presiding over matters related to: Trade defense, non-tariff barriers to trade and investment in renewable energy production, competition policy, state-owned enterprises, enterprises granted special privileges or incentives and designated monopolies, institutional provisions, general provisions and final provisions...

The Ministry of Finance is the focal agency, presiding over matters related to customs and trade facilitation, and government procurement; the Ministry of Science and Technology is the focal agency, presiding over matters related to technical barriers to trade and industrial property; the Ministry of Agriculture and Environment is the focal agency, presiding over matters related to national treatment and market access for agricultural products, food safety measures, and animal and plant quarantine...

Source: Viet Nam Agriculture and Nature News

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