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Vietnam prepares to avoid commercial disputes on environmental regulations

VietNamNet Bridge - Vietnam’s membership in free trade agreements (FTAs) is expected to bring big economic development opportunities to Vietnam. 
VietNamNet Bridge - Vietnam’s membership in free trade agreements (FTAs) is expected to bring big economic development opportunities to Vietnam. However, experts have warned of the challenges Vietnam will face as it has to observe commitments on environmental protection, which are part of next-generation FTAs.


Vietnam has to observe commitments on environmental protection

According to Prof Pham Van Loi, head of the Institute of Environment Management Science, the levels of commitments on the environment in FTAs depend on the concerns of member countries. If Vietnam doesn’t observe the requirements, its export products will be subject to lawsuits and brought to international arbitrators.

To avoid the risks related to commercial disputes on environmental issues, Vietnam needs to set a legal framework to heighten the community’s awareness of environmental protection.

Textile and garments is an important industry for Vietnam, which makes up 15 percent of export value. The industry is listed as one of the biggest beneficiaries from FTAs, but it has a big impact on the environment.

Textile and garments is an important industry for Vietnam, which makes up 15 percent of export value. The industry is listed as one of the biggest beneficiaries from FTAs, but it has a big impact on the environment.

Textile & dyeing projects are unwelcome because of environmental risks. Though local authorities have to compete fiercely with each other to attract investment projects to their localities, they still ignore textile and dyeing projects.

The enterprises in the industry need to exploit, use and discharge a big volume of water, and they need a lot of energy for heating and steam creating. These factors will have an impact on water sources and contribute to an increase in greenhouse gas emissions.

According to the Vietnam Textile and Apparel Association (Vinatex), the industry each year has to spend $3 billion on energy, which pushes the production cost up. 

The problem is that domestic enterprises are mostly small scale and limited in financial capability. They still use old energy-consuming technologies.

Vinatas’ chair Vu Duc Giang, chair of Vinatas, said that customers all over the globe are requiring environmental sustainability, so Vietnam has to change its production method with emphasis on social and environmental standards, or it will lose its competitive edges and opportunities.

Vinatas is now running a project on greening Vietnam’s textile & garment industry by improving water capability management and reaching sustainable energy, which will help manage river valleys, upgrade water quality, and manage energy use.

Fulfilling the commitments on environmental protection is not a new task for Vietnam. However, the obligations in FTAs are now more strict, and Vietnam has little experience in the issue.


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