Increasing standards for imported goods into the European Union (EU), especially for agricultural, aquatic and industrial products, are creating great pressure for Vietnamese exporters to comply.

Increasing technical barriers

With a population of about 450 million people and large purchasing power, the EU is an important market for Vietnamese goods. In particular, after the Vietnam - EU Free Trade Agreement (EVFTA) took effect, many key industries such as machinery, electrical equipment, footwear, mechanical equipment, garments, coffee, tea, spices, etc. have more opportunities to expand exports thanks to tariff incentives.

Exports of goods to the 27-country EU market in 2024 will recover impressively, bringing in 51.66 billion USD, an increase of 8.08 billion USD compared to 2023.

However, access to this market is increasingly facing more barriers, as the EU applies strict standards on product quality, food safety, sustainable production processes and a series of other strict legal regulations.

According to the Vietnam Trade Office in Sweden, the EU is applying stricter regulations on food safety and sustainability, such as requiring imported agricultural products to meet strict pesticide residue limits (MRLs). Some chemicals that are not allowed to be used in the EU will be completely banned on imported products. Most fresh agricultural products imported into the EU also need a phytosanitary certificate, which ensures that the product does not carry harmful organisms.

Dr. Vu Van Tinh, senior advisor at Salus Law Firm, shared: “Recently, the EU has continuously introduced many technical barriers to protect their market. Many Vietnamese businesses do not know or do not know fully, so they are stuck when exporting.”

Consulting for businesses exporting to the EU, Mr. Tinh realized that many businesses have not updated the new standards that this market has set up. Even with the common standards that the EU has been applying for a long time, there are still businesses that are vague. Many businesses are also warned by the EU about intellectual property, product labels, and patents.

The EU sets high requirements for the quality and traceability of agricultural products, requiring Vietnamese exporters to prepare carefully and meet high standards. Enterprises need to have appropriate strategies to not only overcome challenges, but also take advantage of opportunities to expand market share in this region.

One of the typical disputes that Salus Law Firm encountered was a Vietnamese company supplying 100 tons of cashew nuts to a German partner in mid-2023. The first shipment had no problems, but the second shipment was refused import. The customer claimed that the shipment contained pesticide residues exceeding the EU's regulations, leading to a claim for damages of up to 200,000 USD. The Vietnamese company asserted that the product met Vietnamese standards and that the contract did not have clear provisions on pesticide residues.

This case was brought to the Paris Arbitration Center. The results of the assessment showed that the pesticide residues in the shipment were 0.01 ppm, while the EU standard requires a level lower than 0.01 ppm. In the end, the Vietnamese company had to pay $150,000 in compensation, plus $20,000 in legal fees, for a total of $170,000.

Textiles and garments - an industry that exports over $4 billion to the EU each year, with a history of exporting to the region since 1992 - also complained that barriers are increasing, making it difficult for manufacturers.

Last year, the textile and garment industry exported nearly $44 billion, of which about $4.4 billion went to the EU, but it will be difficult to maintain growth if it is slow to update and meet green standards for textiles and garments in the EU. Meanwhile, Vietnam's main competitors in the EU market such as China, Bangladesh, Türkiye, etc. are constantly improving their competitiveness and converting to greener production to increase market share.

Mr. Tran Ngoc Quan, Vietnam Trade Counselor to the EU, informed: “The EU considers the textile and garment industry very sensitive because they believe that this is an industry that generates a lot of waste. To limit this, the EU has introduced regulations on eco-design for sustainable products as well as the application of extended producer responsibility (EPR). These strict regulations cause great difficulties for small and medium-sized enterprises.

The EU eco-label for textile products ensures more sustainable fiber production, less polluting production processes, strict restrictions on the use of hazardous substances and long-lasting final products.

Each year, Europe generates 12.6 million tons of textile waste. Clothing and footwear alone generate 5.2 million tons of waste. Currently, only 22% of post-consumer textile waste is collected separately for reuse or recycling, the rest is often incinerated or landfilled. This is why the EU applies EPR.

Trade Office actively supports businesses

Facing a series of new standards set by EU importers, Mr. Tran Ngoc Quan shared that the Vietnam Trade Representative in the EU has been implementing two groups of solutions to support domestic exporters.

One is the group of solutions on legal support, focusing on information on new policies, combined with local lawyers to support the market for businesses. "We are looking for more EU businesses with moderate import scale so that domestic small and medium enterprises can easily meet the requirements, combined with inviting brands and retail groups to Vietnam to participate in programs connecting international suppliers - Viet Nam International Sourcing".

Second, the Vietnam Trade Office in the EU supports Vietnamese businesses in solving issues related to market access.

Meanwhile, Mr. Vu Van Tinh recommended that businesses must strictly comply with mandatory standards on quality and food safety such as chemical residues, limiting toxic substances in electronic devices, being accurate and honest in applying for certificates of origin (C/O), environmental protection, social responsibility, not using forced labor, etc.

Source: TNCK Magazine