Textile and garments among categories effected by EVFTA/img: moitAdapting to the EU’s Green Trade Requirements
Alongside tariff reductions, the European Union has steadily tightened its environmental and social criteria for imported goods. Overseas suppliers must now comply with complex regulations.
Regulations covering carbon emissions, deforestation-free supply chains, the circular economy, product traceability, clean energy use, the Carbon Border Adjustment Mechanism (CBAM), and social responsibility throughout supply chains are becoming essential criteria for products seeking to enter and maintain a presence in the EU market.
While these strict rules present significant operational challenges, key Vietnamese export sectors — including agriculture, seafood, timber, textiles, footwear, and electronics — have used them as a springboard for modernization. Rather than viewing sustainability criteria merely as non-tariff barriers, many enterprises are actively upgrading technology, securing certified raw material areas, implementing recognized quality management systems, and decarbonizing production.
These proactive measures allow Vietnamese goods to satisfy European regulatory expectations while boosting brand credibility, increasing added value, and sustaining long-term export growth.
Seafood Sector Maintains High-Value Presence
The seafood industry offers a clear picture of the agreement’s real-world impact. According to Nguyen Hoai Nam, Secretary General of the Vietnam Association of Seafood Exporters and Producers (VASEP), annual seafood exports to the EU have stabilized between USD 1.1 billion and USD 1.3 billion, securing the sector's place within Vietnam’s "billion-dollar export club."
"Maintaining export volumes above the USD 1 billion mark represents a substantial achievement. The sector has had to navigate intense global competition, the EU's ongoing supply diversification, and the European Commission’s "yellow card" warning regarding illegal, unreported, and unregulated (IUU) fishing" he said.
Nam highlighted that the EVFTA has helped elevate the standing of Vietnamese seafood across Europe. Vietnam now boasts an extensive network of modern seafood processing plants authorized to export directly into the EU. This infrastructure provides a strong foothold for products—particularly shrimp—to penetrate major European supermarket chains and retail networks.
Record Trade Volumes and Export Surpluses
Data from Vietnam Customs underscores the growing economic ties between the two markets. In 2025, total two-way trade between Vietnam and the EU reached over USD 73.8 billion, representing a year-on-year increase of nearly 8%. Vietnamese exports to the bloc rose 8.6% to top USD 56 billion.
Growth has accelerated further into 2026:
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First-Five-Month Exports (2026): Reached USD 25.78 billion, a 13.3% increase compared to the same period in 2025.
- Trade Surplus: Generated a surplus of USD 17.87 billion, Vietnam's largest trade surplus with any single trading partner bloc.
Manufactured electronics, computers, and components continue to form the backbone of Vietnam’s shipments to Europe. Simultaneously, the agricultural sector has seen remarkable gains, led by strong export volumes and values for coffee, fresh fruits, vegetables, cashew nuts, and seafood.
Overcoming Rules of Origin and Preferential Tariff Bottlenecks
Despite overall trade growth, Vietnamese exporters have not fully tapped the agreement's potential. According to the Ministry of Industry and Trade, the utilization rate of preferential certificates of origin (C/O) under the EVFTA stood at 34.6% in 2025, showing a slight decline from the previous year.
Tran Thanh Hai, Deputy Director General of the Agency of Foreign Trade, stressed that satisfying rules of origin is essential for unlocking preferential import tariffs over standard duty rates. To achieve this, companies must restructure their supply chains, increase the share of locally produced raw materials to simplify the origin-verification process.
For products whose raw materials cannot be sourced locally, businesses should proactively source inputs from economies that are parties to the same free trade agreements.
Navigating New Regulatory Horizons: CBAM and EUDR
Trade experts emphasize that the core driver of export competitiveness is shifting from basic labor costs and tariff advantages toward advanced data governance, supply chain transparency, and verifiable sustainability metrics.
Nguyen Thi Hoang Thuy, Trade Counsellor and Head of the Vietnam Trade Office in Sweden (covering the Nordic region), noted that high-growth product categories face the heaviest regulatory scrutiny.
Electronics & Machinery are subject to strict safety, chemical composition, durability, and repairability rules. Textiles & Footwear are required to provide full transparency regarding raw materials and product life cycles. Coffee, Timber & Wooden Furniture must demonstrate complete supply chain traceability back to the farm or harvesting site.
Two major EU environmental frameworks are reshaping export requirements:
Carbon Border Adjustment Mechanism (CBAM): Entered its definitive phase on January 1, 2026, targeting carbon-intensive imports like steel, aluminum, cement, and fertilizers. While direct impacts on certain regions remain limited for now, European buyers are systematically requesting verifiable data regarding energy consumption and greenhouse gas emissions. Conducting carbon footprint assessments is rapidly becoming a mandatory commercial requirement, especially for expanding steel exports.
EU Deforestation Regulation (EUDR): Phasing in enforcement for large and medium enterprises by late 2026, followed by small and micro-businesses in mid-2027. The EUDR directly impacts coffee, rubber, timber, and cocoa. Exporters must provide precise geolocation data for production plots and track inputs across all processing stages. Companies with existing, robust traceability systems stand to gain a major advantage in high-value European market segments.
A Framework for Sustainable Economic Growth
The EVFTA functions as much more than a standard tariff-cutting agreement; it serves as a structural catalyst encouraging Vietnamese enterprises to modernize operations, elevate product quality, and align with global green standards.
As businesses continue to improve their utilization of tariff preferences while mastering rules of origin and environmental compliance, the EVFTA will remain a principal engine for Vietnam’s long-term export expansion, market diversification, and sustainable economic transformation.
(moit.gov.vn)