There will be new requirements for sustainability that demand adjustments in production activities.

Many industries are affected by the European Green Deal

Nguyen Thi Hoang Thuy, Trade Counselor, Vietnam Trade Office in Sweden, and Northern Europe, said that in the EU market in general and Northern Europe in particular, the European Green Deal was a new policy that was expected to impact trade activities with this region, opening up new possibilities for business operations both within and outside the EU.

Some visible policies and strategies that affect exports to the EU are the Carbon Border Adjustment Mechanism (CBAM), the Farm to Fork Strategy, the Circular Economy Action Plan, and the Biodiversity Strategy up to 2030.

"It can be said that this is a comprehensive plan to achieve climate neutrality while also being a strategy for development. For businesses, there will be new requirements for sustainability that demand adjustments in production activities," said Thuy. She added that essentially, the EU would require products circulating in the market to be sustainable, reusable, repairable, recyclable, and energy-efficient.

Sustainable food must meet general definitions, principles, requirements, certifications, and labeling plans. Amendments are underway, and a new legal framework will be proposed in 2023.

The Vietnam Trade Office in Sweden and Northern Europe evaluated that being an important partner of the EU, the European Green Deal has the potential to impact certain industries in Vietnam, depending on the nature of the industry and specific measures taken under the agreement.

One of the industries that may be affected by this agreement is the textile, apparel, and footwear industry. The EU is a major export market for Vietnam's textile, apparel, and footwear products. The European Green Deal, specifically the Circular Economy Action Plan, will require textile products to be manufactured using environmentally friendly materials and processes, while also meeting strict sustainability standards and eco-labeling.

"Vietnamese businesses in this field need to adjust their production processes and invest in new technologies to maintain competitiveness," noted Thuy.

In the packaging industry, packaging materials must be environmentally friendly and fully recyclable. This will impact Vietnamese businesses in the packaging manufacturing sector as well as those using packaging for export products.

Another sector that may be affected by the European Green Deal is agriculture and aquaculture. The Green Deal sets out a more sustainable and environmentally friendly approach to agriculture, which will require Vietnamese businesses to meet new standards for sustainable farming practices and food production. They will also need to invest in new technologies and change production processes to reduce waste and minimize the use of harmful chemicals.

The steel industry also has the potential to be affected as the Green Deal aims to reduce the use of energy-intensive materials and transition to more sustainable materials.

According to Thuy, the European Green Deal poses challenges for Vietnamese businesses, but it also creates new development opportunities. Businesses need to be aware of the changes that the agreement will bring and be prepared to adapt to these challenges to maintain competitiveness in the EU market. They should also proactively embrace new trends to produce sustainable and environmentally friendly products for long-term benefits.

Opportunities from supply chain connectivity

The representative of the Vietnam Trade Office in Sweden and Northern Europe stated that detailed information on these issues would be provided in a series of forums and workshops at the Vietnam International Sourcing event.

In particular, the Vietnam Trade Office in Sweden has extensively promoted the event "Connecting international supply chains" (Vietnam International Sourcing 2023) through various channels and actively sought and contacted procurement delegations, importing enterprises, and local distribution companies to participate in exhibition and workshop activities.

"We expect to organize a procurement delegation with more than 10 Northern European businesses to participate in this event. Additionally, potential buyers such as IKEA and H&M are expected to send representatives to source products in Asia and Vietnam during the event. Swedish businesses hope to engage in trade and business meetings at the exhibition with Vietnamese companies that offer high-quality products, have international certifications, and specialize in industries where Vietnam has strengths, such as food, textiles, footwear, sports equipment, household appliances, and furniture," said Thuy.

The Vietnam Trade Office in Sweden expected that through this event, Northern European businesses would find more sourcing opportunities from Vietnam and establish new trade agreements and business ideas.