Vietnam‘s trade in environmental products has mainly focused on renewable energy, the World Bank said.
Considering all products, Vietnamese world exports were $407 billion in 2021, ranking 17th globally.
Conversely, Vietnam’s imports totaled $329 billion, the 19th position among the world’s largest importers.
In particular, its exports of solar cells and heliostats recorded exceptional annual growth rates between 2010 and 2020 – of 81.6% and 71.2%, respectively – highlighting the change in the structure of Vietnam’s export basket.
The World Bank believes that this economic transformation and the emergence of new sectors is likely to create new and more sustainable jobs in a sector that will continue to grow as the world shifts rapidly towards more climate-friendly trade, production and consumption.
The solar PV cell sector is a niche sector that is often embedded in complex value chains. Therefore, access to inputs is critical to maintain a sustainable growth rate in the coming years.
Vietnam is already a major player in solar equipment, but the World Bank says it can position itself in wind-related technologies and electrical equipment.
However, policies enacted by trading partners (importers) may affect this trade, so the World Bank recommends market diversification.
Opportunities also exist in growing markets, such as the African continental free trade area.
The World Bank recommends that Vietnam facilitate imports of clean technologies by reducing non-tariff measures on environmental goods and services.
Vietnam imposes a low average tariff (0.33%) on environmental goods, but several non-tariff measures continue to hinder trade flows.
Considering that Vietnam’s simple average applied tariffs for all products was 12% in 2020, environmental goods face a near-zero tariff.
However, tariffs on environmentally preferable products are high at 8%, so there is potential for tariff reduction in this area.
In contrast, Vietnam imposed 199 non-tariff measures on 54 environmental products in 2020. Renewable energy products face the highest number of non-tariff measures, followed by waste management and control equipment.
For example, solar cells must comply with labeling, inspection and conformity assessments when imported into Vietnam.
However, all imported products are subject to these requirements, so it can be argued that environmental goods are hardly treated differently from other products.