The EU-Vietnam Free Trade Agreement (EVFTA) was signed after many years of negotiations. This Agreement is expected to open up benefits for companies, consumers and workers in the European Union (EU) and Việt Nam, while strengthening respect for the rights on labor and environmental protection. After signing, the Agreement will have to undergo an internal approval process in the EU and Việt Nam to officially take effect.
The EVFTA’s environmental commitments, obligations and agreements
The EVFTA consists of 17 Chapters and the environmental contents of the Agreement are in Chapter 17 on Sustainable Development. The commitments and obligations related to the environment are established in the EVFTA to enhance the reciprocity between trade and environmental policies, ensuring that trade and investment activities will have no negative impact on environmental protection. In the Chapter on Sustainable Development, the environmental commitments, obligations and agreements cover specific areas and actions such as: The commitments and obligations on the serious and effective implementation of Multilateral Environmental Agreements (MEAs) to which the Parties are the members (the Convention on Biological Diversity - CBD, the Convention on International Trade in Endangered Species of Wild Fauna and Flora - CITES, the United Nations Framework Convention on Climate Change - UNFCCC...); Establishment of the environmental protection level: The parties should endeavor to maintain environmental protection activities at a high level and must not reduce the legal effect on the environment to attract trade and investment (the environmental standards and regulations, if adjusted/amended, are allowed to be increased only). The environmental protection level is decided by each party, but not lower than the committed level in the MEAs; To enhance the willingness and corporate social responsibility (CSR) of businesses in production and business according to international rules and guidance of the Organization for Economic Co-operation and Development (OECD); To strengthen the conservation and management of natural resources; To prevent illegal logging and illegal fishing, etc.
Thus, it can be said that both the EU and Việt Nam respect and set goals for sustainable and harmonious development between economic development and society and environmental protection. Therefore, the environmental commitments and obligations established in the EVFTA impose a demand on the responsibilities of the Government, enterprises and all citizens to seriously and effectively implement these commitments and obligations. For enterprises, the EVFTA is a new generation agreement with very high standards. Therefore, besides meeting requirements and standards on trade in goods and services, Vietnam also needs to comply with and meet high environmental requirements and standards. The EU is a group of developed European countries with very high and strict requirements on environmental standards, quality and safety for goods imported from abroad. Therefore, for goods and on the environment, the EU issues strict regulations on relevant technical regulations and standards. For example, products must be labeled with the CE (mandatory brand for goods (as prescribed) and be treated as a commercial passport into the EU market) in order to be considered to meet safety and environmental regulations and be circulated on the EU market. Over the past time, the EU has been paying more and more attention to the factors showing the environmental friendliness of the products and the corporate social responsibility in its goods and services trading.
Some challenges when the EVFTA takes effect
In the current situation, when the EVFTA takes effect, it will be difficult for enterprises to immediately meet the requirements of high standards and regulations related to the environment, especially for enterprises with outdated production and business technologies. At the same time, many enterprises lack information or do not know the accurate and timely information about the EU’s environmental standards, requirements and conditions, which will affect production and business activities. Recently, although many enterprises have changed in their awareness of environmental protection, it is still limited due to development level or economic difficulties.
The Signing Ceremony of EVFTA
For regulatory agencies at all levels, the signed EVFTA will have difficulties in implementing environmental commitments and obligations, resulting from a number of reasons such as the system of policies and laws on the environment is still in the improvement process. Recently, many environmental policies and laws have been developed and enacted; however, in some areas related to the environment, there is a lack of specific regulations and an overlap in management, leading to difficulties and shortcomings in the management and implementation of international commitments and obligations. The implementation and compliance with environmental laws in general are not really effective as expected. Although there are laws and regulations on environmental protection, along with strengthening inspections, examinations and sanctions against violations of environmental laws, there are still many violations of environmental laws that are detected. The capacity of the staff in dealing with international trade issues related to the environment has not met the requirements. The financial resources for environmental protection activities are limited. The financial difficulties will lead to difficulties in adequately investing in modern technologies for environmental protection management. This will lead to difficulties in meeting and complying with the obligations and high standards committed in the Agreements. Along with preferential tariffs and gradual removal of trade barriers, the import of goods, supplies and technologies under conditions of environmental standards is still lower than that of international standards in general, especially of developed countries, which leads to the risk that Vietnam becomes a place to store and use outdated equipment and production lines, and consume low quality goods. There is still a situation where local authorities are applying various incentives to attract FDI, while not really paying attention to environmental protection and sustainable development.
Proposal of solutions
In the coming time, when the EVFTA takes effect, Vietnam needs to be prepared and ready for the implementation of environmental commitments and obligations, in the immediate future, it is necessary to have a specific and comprehensive action plan to address the above-mentioned difficulties and challenges, focusing on a number of main contents such as:
Perfecting policies and laws: Reviewing, amending, supplementing and perfecting the system of policies and laws on environmental protection, ensuring the uniformity and consistency of the domestic legal system, compatibility with environmental commitments and obligations in the MEAs and the EVFTA. Amending, supplementing and perfecting the system of policies and laws on environmental protection, especially perfecting the system of appropriate and harmonized (asymptotically) environmental standards and regulations with the regional and international systems of standards and regulations.
Strengthening the inspection, examination and supervision of the observance of the law on environmental protection, ensuring strict control over those sectors and fields likely to cause high environmental pollution, strengthening responsibilities of organizations and individuals concerned, increasing sanctions to deal with environmental law violations.
Strengthening (human and financial) resources: Training and fostering knowledge about trade related to environment and environment related to trade, as well as strengthening the capacity and level of international trade dispute settlement, including disputes related to environment for the contingent of managerial officials, legal officials/experts of the concerned Ministries and branches; investing in activities related to environmental protection; developing mechanisms to encourage the private sector to participate in trade and service activities related to environmental protection in order to make full use of resources from enterprises and people for environmental protection activities.
IEC, awareness raising: Organizing information and widely propagating about compliance with environmental commitments and obligations in the EVFTAs for all subjects, especially for enterprises; providing information on the consequences and impacts of violations of these commitments and obligations and encouraging participation and propaganda to raise the awareness of people and enterprises in environmental protection activities.
Establishment of coordination mechanisms to address environmental issues in the EVFTA: The contents of environmental commitments and obligations in the EVFTA involve many Ministries, sectors and fields. Therefore, in order to ensure the serious and effective implementation of these commitments and obligations, it is necessary to establish mechanisms of coordination and inter-sectoral cooperation at the central and local levels and between the central and local levels. In addition to coordination and cooperation in the implementation of commitments and obligations, these coordination mechanisms are particularly necessary and important when dealing with emerging issues (for example, trade disputes related to the environment) during the implementation of the EVFTA.
For enterprises, in order to continue to maintain a foothold in the market, expand and develop goods and services to the markets of developed countries, the important things are: Raising awareness and responsibility of environmental protection of enterprises, learning and grasping information on environmental requirements and standards of developed countries and markets, attaching importance to solutions on management and investment in technological innovation to meet the environmental high standards of these countries and markets.
Hoàng Xuân Huy
Deputy Director of International Cooperation Department, MONRE