The EU is one of the world's most promising export markets with a population of over 740 million and a gross domestic product (GDP) exceeding 18 trillion USD. It is Vietnam's third-largest export market, encompassing strong sectors such as footwear, textiles, agricultural products, and consumer electronics.

New and stringent regulations

Vietnam's export to the EU recently benefited significantly from the Vietnam-EU Free Trade Agreement (EVFTA).

According to General Department of Vietnam Customs, total export value to the EU over the past four years since EVFTA took effect (from August 2020) is estimated at over 200 billion USD, with an annual increase of 12-15%. In 2024, Vietnam's exports to the EU reached 52.1 billion USD, a 19.3% increase year-on-year.

Citing survey by the European Chamber of Commerce in Vietnam (EuroCham), Dinh Sy Minh Lang, an official from the Department of European-American Markets under the Ministry of Industry and Trade, reported that the EVFTA has significantly boosted Vietnam's exports to the EU, from 35 billion EUR in 2019 to over 51 billion EUR in 2024. 

Sectors that benefited the most from the deal included electronics, textiles, footwear, agriculture, and seafood, thanks to tariff reductions under the agreement.

Since 2021, the import turnover of Vietnamese goods in most EU countries has increased.

Tran Thanh Hai, Deputy Director of the Agency of Foreign Trade noted that major EU export markets have surpassed 3 billion USD in turnover, such as the Netherlands (accounting for 24.56% of Vietnam’s total exports to the EU), Germany (15.49%), and Italy (nearly 10%).

The EU market still has significant untapped potential, as the market share of Vietnamese goods remains relatively small.

However, senior economist Nguyen Thanh Hung, former head of the National Steering Committee on International Integration, raised concerns that new EU regulations will significantly impact Vietnam's exports.

On May 13, 2024, the EU introduced new import procedures. Accordingly, from June 3, 2024, all imported goods must be declared through the Import Control System 2 (ICS2). This system aims to better protect the European common market and citizens through enhanced safety and security measures.

Shipping companies by sea, inland waterways, road, and rail must provide data on goods sent to or through the EU before arrival. ICS2 also applies to postal and express delivery services and in some cases, the final recipient established in the EU must submit a complete Entry Summary Declaration (ENS) to ICS2.

Hung warned if the parties involved are unprepared and fail to provide data as required by ICS2, goods will be stopped at EU borders and not cleared by customs. 

Promoting sustainable exports

 

One of the most discussed new regulations affecting exports to the EU is the Carbon Border Adjustment Mechanism (CBAM), which has been piloted since October 1, 2024, and will be fully implemented in 2026. Accordingly, the EU will impose a carbon tax on all goods imported into its internal market based on the intensity of greenhouse gas emissions of the host country’s production process.

Europe aims to become a carbon-neutral continent by 2050, and they are concerned that EU companies might move high-carbon emission activities abroad to exploit lax standards, undermining Europe's and the world's carbon neutrality ambitions.

The Nordic countries show special attention to climate change and environmental protection. They have established various institutions for imported goods, such as the Farm to Fork strategy, which aims to reduce pesticide use by 50% by 2030, and the Circular Economy Action Plan, which aims to make sustainable products the standard in the EU.

To export to the EU and Nordic countries, businesses must understand these regulations and market trends to develop new approaches. Vietnamese enterprises must transition their production models to align with the EU’s new requirements, Hung emphasised.

Meanwhile, Dinh Sy Minh Lang noted that as EU retailers prioritise sustainable, eco-friendly, and fair-trade products, Vietnamese businesses must expand exports via official channels.

 

According to him, exports via unofficial channels, although quick and simple, are practiced in small border markets, making quality control difficult, affecting the reputation of Vietnamese goods. Moreover, this practice is not supported by the state and poses high risks, such as violating import regulations or facing disputes.

In contrast, formal exports, despite requiring complex procedures and multiple taxes and fees, ensure strict quality control, enhancing product credibility with consumers. This practice is less risky due to clear legal frameworks and offers opportunities for businesses to access large and choosy markets.

To succeed in exports via official channels, businesses need to identify target markets, research standards and regulations, and assess their capabilities to develop effective strategies, he suggested.

For example, Germans prefer wooden products over plastic and favour seafood over meat. They also require products to be packaged with clear labelling, including product names, production locations, storage conditions, and full barcodes. Meanwhile, the Dutch prefer new and innovative products. They like fresh, small-packaged goods with a long shelf life.

Next, businesses should select standards suitable for their target products and target markets, such as ISO 9001 international quality management standard, and Hazard Analysis and Critical Control Point System (HACCP). They should improve technology, enhance techniques, and train personnel to control product quality and meet the EU's stringent standards.

In addition, businesses must comply with local laws when processing customs procedures to avoid legal risks and ensure smooth clearance.

Finally, attention should be paid to building and promoting the brand through trade promotion programmes, trade fairs and exhibitions. 

Exports via official channels will undoubtedly generate higher revenue and profits for businesses, promoting sustainable exports.

Source: Nhandan News