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Nov 02, 2023 / 22:08

EU seeks cooperation with Vietnam on rare earths

The EU is keen to foster collaboration with Vietnam across various sectors, with a strong emphasis on the green economy.

The European Union (EU) expects to bolster cooperation with Vietnam on the field of rare earths, said Vice President of the European Commission (EC) Valdis Dombrovskis during a press conference held today [November 2].

 Vice President of the European Commission Valdis Dombrovski (l) and Head of the EU Delegation to Vietnam Julien Guerrier. Photo: Lien Ha/The Hanoi Times

Valdis Dombrovskis said that the EU is keen to foster collaboration with Vietnam across various sectors, with a strong emphasis on the green economy. He stressed that transitioning to a green and digital economy requires different inputs than the traditional fossil fuel-based economy. This includes sourcing vital materials such as rare earths and new raw materials, which are crucial components of this process.

In this context, the EU expects to cooperate with Vietnam in these areas, Dombrovskis told The Hanoi Times.

He also brought up the European Raw Materials Strategy, which outlines cooperation with countries to diversify sources and supply chains for essential input materials during the transition to a green economy. The EU aims not only to support the extraction of these resources but also to encourage their processing and manufacturing, thereby increasing the value that participating countries gain.

Trade relations as highlight

Dombrovskis emphasized that Vietnam holds a significant position as a major trading partner of the EU, particularly in the Southeast Asian region.

Regarding the collaboration between Vietnam and the EU, he noted that they are making substantial progress in various aspects, particularly in the three years following the implementation of the Vietnam-EU Free Trade Agreement (EVFTA).

He emphasized that in 2022, the bilateral trade turnover between the EU and Vietnam reached a record  EUR64 billion ($68 billion), solidifying Vietnam's position as Europe's largest trading partner in the Southeast Asian region. Vietnamese products have gained significant traction in European markets compared to their regional counterparts, he added.

Dombrovskis also mentioned that a Vietnamese delegation is expected to visit Brussels soon to discuss the more effective implementation of the EVFTA. A notable aspect of the green cooperation framework between Vietnam and the EU is the Just Energy Transition Partnership (JETP), which was signed in December 2022 in Brussels.

He noted that the resource mobilization plan for the JETP is in its final stages of development. Notably, this mechanism will require substantial financial resources primarily sourced from the private sector. Public funding and non-refundable assistance are limited and serve as catalysts to stimulate and leverage significant resources from the private sector. Consequently, creating an enabling environment to engage the private sector is of paramount importance to achieving the objectives of the green transition, he added.

Additionally, Dombrovskis highlighted that the mechanism encompasses a crucial element of reforming Vietnam's legal regulations and aligning the domestic legal framework with the standards set by the JETP.

Acknowledging Vietnam’s efforts in combating IUU
In October 2023, an EU inspection team focused on combating illegal, unreported, and unregulated (IUU) fishing visited Vietnam.
Dombrovskis informed that both sides have identified issues requiring close collaboration and solutions.

He added that Europe acknowledges Vietnam's considerable efforts in establishing a legal foundation to combat IUU fishing, but the current challenge lies in effectively enforcing these legal regulations.

The EU has expressed its strong commitment to support and work alongside Vietnam. In the coming months, a new EU inspection team is expected to visit Vietnam to address this issue, and a decision regarding the possible removal of the IUU yellow card for Vietnamese seafood will be taken shortly, said Dombrovskis.

Rare earth, or rare earth elements (REEs), are a group of 17 chemical elements found in the Earth's crust, including scandium and 15 lanthanides. They have unique properties and are essential for various high-tech applications. While not truly rare, these elements are often found in complex mineral deposits, making their extraction and separation challenging. They play a vital role in manufacturing electronics, renewable energy tech, and more.

Vietnam is estimated to possess approximately 22 million tons of rare earth reserves, making it the world's second-largest holder of these resources, trailing only behind China, as reported by the US Geological Survey.