The EU-Vietnam Free Trade Agreement, EVFTA, has expanded opportunities for Vietnamese exports to the EU. However, the EU Deforestation Regulation, EUDR, is raising market standards and requiring Vietnamese businesses to move beyond tariff advantages toward greater transparency and supply chain traceability.
EVFTA Creates New Opportunities for Vietnamese Goods in the EU
After six years of implementation, the EU-Vietnam Free Trade Agreement has delivered significant benefits for businesses.
Citing official data from Vietnam’s Customs Department and Statistics Department under the Ministry of Finance, the European Chamber of Commerce in Vietnam, EuroCham, noted that total bilateral trade between Vietnam and the EU exceeded USD 900 billion from January 1995 to June 2026.
Notably, USD 383.8 billion, equivalent to 42.6% of total bilateral trade over the past three decades, was generated in just the six years since the EVFTA officially entered into force in August 2020.
However, businesses can only take full advantage of the EVFTA if they are able to meet market requirements, particularly technical regulations.
Most recently, on July 13, 2026, the European Commission published a new version of its guidance document on the implementation of Regulation (EU) 2023/1115 on deforestation-free products, EUDR.
The guidance aims to clarify and ensure consistent interpretation and implementation of several key aspects of the EUDR, including product scope, responsibilities of supply chain actors, due diligence requirements, risk assessment, legality of production, traceability and the use of agricultural land.
The EUDR applies to seven main commodities: cattle, cocoa, coffee, palm oil, rubber, soy and wood, together with related products listed by commodity code in Annex I of the Regulation.
For Vietnam, sectors likely to face significant direct impacts include coffee, rubber, wood and wood products, as well as certain processed products containing raw materials covered by the Regulation.
Speaking to Industry and Trade Newspaper, Ms. Nguyen Thi Hoang Thuy, Director General and Head of the Vietnam Trade Office to the EU, highlighted several points businesses should pay close attention to.
According to Ms. Thuy, the guidance clearly distinguishes three activities: placing a product on the EU market for the first time, making a product available further along the EU market, and exporting a product from the EU.
Responsibilities are assigned accordingly to operators placing products on the market for the first time, operators at subsequent stages of the supply chain, and traders.
For products manufactured outside the EU, the importer named in the customs declaration is generally the main entity responsible under the EUDR.
However, the importer’s compliance depends heavily on information, data and documentation provided by producers, suppliers and exporters in the country of production.
Therefore, even if Vietnamese businesses are not directly responsible for submitting due diligence statements through the EU Information System, they must still prepare sufficient data for their EU importing partners to fulfill their obligations under the Regulation.
“Under the EUDR, relevant products may only be placed or made available on the EU market, or exported from the EU, if they simultaneously meet three conditions: they are deforestation-free and do not contribute to forest degradation; they are produced in accordance with the relevant legislation of the country of production; and they are covered by a due diligence statement or a simplified declaration as prescribed,” Ms. Thuy noted.
One of the most important requirements under the EUDR is the ability to trace goods back to the area of production.
Businesses need to systematically prepare and manage information including the geographical location of plots or production areas, commodity type, quantity, production or harvest period, information on producers, suppliers and other supply chain participants, documentation proving land-use rights and the legality of production activities, evidence that the production area has not been associated with deforestation after December 31, 2020, and documentation enabling verification of consistency between raw material sources, production volumes, processing and exports.
The guidance also notes that the more intermediaries, sourcing areas, countries of production and mixed raw material sources involved in a supply chain, the greater the complexity and risk of non-compliance.
If all stages cannot be fully identified or raw materials cannot be traced back to their production areas, the product may be assessed as posing more than a negligible risk.
What Should Vietnamese Businesses Do?
In light of these requirements, Ms. Thuy advised businesses to take urgent preparatory steps before the EUDR is fully applied.
These include reviewing HS codes to determine whether products fall within the scope of the EUDR, mapping entire supply chains and sourcing areas, standardizing geolocation data and legal documentation for production areas, establishing mechanisms to separate, identify and control raw materials from different sources, and verifying consistency between sourcing data, output, procurement, processing and export volumes.
Businesses should also agree with EU customers on the format, method and timing for data provision, while establishing document-retention procedures and response mechanisms for cases where potentially non-compliant information is identified.
Early preparation will not only help companies comply with the EUDR, but will also strengthen transparency, traceability and their ability to participate in sustainable supply chains in the EU market.
From the business perspective, Mr. Ngo Sy Hoai, Vice Chairman and Secretary General of the Vietnam Timber and Forest Products Association, told Industry and Trade Newspaper that Vietnam was the second country in Asia, after Indonesia, to sign a Voluntary Partnership Agreement, VPA, with the EU.
This is considered an early preparatory step that has helped the timber industry build a foundation for meeting the EU’s new standards.
According to Mr. Hoai, Vietnam has in recent years focused on improving its policy framework and strengthening monitoring and management in a direction increasingly aligned with EU requirements.
“We have made fairly systematic preparations. The mechanism for issuing FLEGT, Forest Law Enforcement, Governance and Trade, licenses for individual export consignments is still being discussed to ensure consistency with the EUDR,” Mr. Hoai said.
For Son La Province, one of Vietnam’s major coffee-growing localities, Vice Chairman of the provincial People’s Committee Nguyen Thanh Cong said at a recent meeting with the Ministry of Agriculture and Environment that the province’s total coffee area is currently estimated at 33,628 hectares, up 44.25% compared with 2024.
The sharp increase in coffee-growing area has been driven by persistently high coffee prices in recent years, favorable market demand, stronger promotion and market-development activities, and increased investment by businesses and household producers in purchasing and processing coffee products. These factors have encouraged farmers in several areas to expand new coffee plantations.
Son La has also actively disseminated information to organizations and individuals on EUDR-related requirements for exporting relevant goods and products.
At the same time, the province has reviewed agricultural crop areas located on forestry land and developed plans to shift toward production that does not cause deforestation or forest degradation, while promoting sustainable production linked to natural resource conservation and local social welfare objectives in line with land-use planning.
To meet EUDR requirements, Son La has also urged businesses and cooperatives to exercise strict control over sourcing areas, establish traceability systems and avoid purchasing coffee from areas at risk of EUDR violations, thereby protecting their reputation and maintaining access to export markets.
Most EUDR obligations will apply from December 30, 2026.
For operators established as micro or small enterprises before December 31, 2024, the application date is postponed until June 30, 2027, except for certain cases involving wood and wood products that are subject to separate transitional arrangements.