AsemconnectVietnam - Meeting the standards and regulations in EVFTA not only creates conditions for increasing exports to the EU market but also promotes businesses to expand production scale and participate more deeply in the global supply chain.

The "key" to opening the market
International trade is increasingly affected by protectionist policies, in which the US's reciprocal tax policy is a factor affecting Vietnam's key export industries, including textiles and garments. Vietnam's textile and garment industry, with an export turnover of more than 40 billion USD/year, creating jobs for more than 2.5 million workers, is facing higher requirements on origin, environment and supply chain.
In that context, Vietnamese enterprises are required to effectively utilize free trade agreements (FTAs) to diversify export markets, reduce dependence on some traditional markets, improve competitiveness through production innovation, and develop sustainable supply chains. In particular, the Vietnam - EU Free Trade Agreement (EVFTA) has brought many tariff incentives for Vietnam's textile and garment exports.
Vietnamese enterprises optimizing the advantages of EVFTA will help the textile and garment industry diversify markets, reduce dependence on the United States, and take advantage of extensive tariff incentives from the EU. At the same time, this is also a driving force to encourage Vietnamese textile and garment enterprises to participate more deeply in the global supply chain, from weaving, dyeing, sewing to intermediate stages.
Thereby, enterprises have the opportunity to increase the localization rate and add value to products. Sharing at the seminar "How does the textile and garment industry take advantage of EVFTA to respond to the reciprocal tax policy?" recently organized by the Industry and Trade Newspaper, Mr. Pham Nhu Phuong - Head of the Import and Export Department, Ministry of Industry and Trade said that the EU is currently the second largest export market of the Vietnamese textile and garment industry, and the EVFTA Agreement is opening a "second door" to help the Vietnamese textile and garment industry reduce market risks, while moving towards a greener and more sustainable production model according to European standards.
However, to better take advantage of the tariff incentives in the Agreement, manufacturing and exporting enterprises must pay attention to investing in technology and complying with the rules of origin from fabric onwards. And this rule is still one of the major challenges for the Vietnamese textile and garment industry. Sharing more about this issue, Vietnam Trade Counselor in Sweden, concurrently in Northern Europe - Ms. Nguyen Hoang Thuy said that the US application of the reciprocal tax policy is not only an immediate challenge for Vietnamese exports, but also a test for the ability to adapt, diversify and reposition the market of Vietnamese enterprises.
Textiles and garments are the most clearly affected industry, due to the large export scale and the very high proportion of exports to the US. However, in that challenge, EVFTA is opening a new door to help the Vietnamese textile and garment industry reduce market risks, while moving towards a greener and more sustainable production model according to European standards.
Shifting the market to the EU, including the Nordic countries, is a logical reaction in the short term. Although the size of the Nordic market cannot replace the US in terms of turnover, this region has long-term strategic value thanks to its stability, advantages from EVFTA and high demand for sustainable products. Ms. Thuy believes that instead of competing on price, Vietnamese enterprises need to switch to high-value product lines, with clear traceability, ensuring environmental and labor standards in line with green consumer tastes that are dominating the whole of Europe. When put into operation, Vietnamese enterprises will benefit directly, both meeting the EVFTA rules of origin and reducing import dependence and carbon emissions.
Counselor Nguyen Hoang Thuy also noted that the Extended Producer Responsibility (EPR) regulation in the textile and garment industry that the European Union is implementing is a strategic turning point, which can be called a "new rule of the game" that reshapes the entire global fashion supply chain. If EVFTA opens up tariff incentives, helping Vietnamese goods enter the EU market, EPR sets standards for Vietnamese goods to stay long-term, sustainably and have a place in the new value chain.
According to EPR, European brands must take responsibility for the entire product lifecycle, from design, production, distribution to collection and recycling. This opens up new markets for partners with circularity, traceability and low emissions capabilities. Vietnam can become Europe’s “green manufacturing base” in Asia, if it invests early in recycling technology, clean energy and ESG governance.
If EVFTA is considered the “gateway”, then EPR is the “measure of the survival capacity” of Vietnamese goods in the EU. Vietnam needs not only to change markets, but also to change its role from a short-term supplier to a sustainable development partner, contributing to reshaping the world’s green fashion supply chain, Ms. Nguyen Hoang Thuy emphasized.
Enterprises improve their capacity to meet green standards
Affirming that EVFTA is truly a “fulcrum” to help Vietnamese textiles penetrate deeper into the EU market. However, the Vietnamese Trade Counselor in Sweden, concurrently working in Northern Europe, also emphasized that to take advantage of this incentive, businesses must not only rely on tax rates, but more importantly, must adapt to new standards on the environment, traceability and sustainable development, factors that are shaping the entire European fashion supply chain. EVFTA opens the door, but it is the businesses that must step through that door with green capacity, strategy and reputation. The Vietnam Trade Office in Sweden will continue to accompany, provide information, promote and connect. But success or not depends on the extent to which Vietnamese enterprises dare to change to suit the standards of an increasingly strict but potential market.
In order to support the improvement of the competitiveness of textile and garment enterprises through green supply chains and digital export, the representative of the Import-Export Department, Ministry of Industry and Trade emphasized that the Ministry of Industry and Trade as well as ministries and branches always accompany enterprises in controlling emission sources and promoting recycled waste treatment technology, aiming to reduce greenhouse gas emissions as well as building a strong, green environmental industry. Along with that, priority is always given to trade promotion programs for circular products and supporting enterprises in building a traceability system, meeting the requirements of information transparency and transparency of raw materials in the export supply chain.
In addition, the Ministry of Industry and Trade also regularly has related programs to support businesses such as: National trade promotion program, national brand program... or support policy mechanisms from programs such as national industrial promotion program, supporting industry program... These programs focus on building mechanisms, policies, and support measures to help businesses transform domestically, convert technology, reduce emissions in production, business and energy consumption issues, ensure operations for workers, improve quality for workers. However, in order for textile and garment exporting enterprises to take full advantage of incentives from EVFTA, boost exports to the EU market, first of all, enterprises should proactively place orders with training facilities. Because in order to take advantage of incentives from EVFTA, enterprises need to clearly understand the rules of origin as well as production processes that meet the requirements of circulation and green standards of the EU market.
Enterprises are the units that most specifically grasp the requirements of the import market, from which they can propose appropriate training content. Through training programs designed according to actual needs, training institutions will provide high-quality human resources that understand market requirements for enterprises. This is a "win-win" cooperation model between enterprises and training institutions, bringing benefits to both sides.
Second, from high-quality human resources, enterprises can increase investment in research and development and application of modern technology in production. Increasing automation, AI application, digital transformation in production chains, management chains and supply chains will help improve labor productivity, optimize costs and improve production efficiency. These solutions also contribute to supporting enterprises to flexibly adapt to US reciprocal tax policies.
Third, enterprises need to focus on sustainable development and brand building, because this is an inevitable direction. When wanting to penetrate deeply into the EU market within the framework of EVFTA, businesses must focus on using recycled materials, minimizing emissions during the production process and optimizing resource use. At the same time, it is necessary to increase the localization rate to meet the rules of origin required by EVFTA, thereby improving the competitiveness and value of products.
CK
Source: VITIC/moit.gov.vn