Vietnam is the world’s largest producer and exporter of culinary black pepper (Piper nigrum), accounting for 60% of the world’s trade with production in 2019 reaching 250,000 tons. Vietnamese pepper accounts for roughly 45% of the volume of pepper imports into the EU, where high-quality standards set the benchmark for other markets.

In 2022, global pepper exports recorded a decline in most producing countries as demand was affected by the COVID-19 pandemic and the Russia-Ukraine conflict, leading to high inflation in many countries. Pepper exports from Vietnam in 2021 and 2022 decreased by 12% and 6.2%, respectively. Given a drop in current prices, many farmers are likely to limit their investments in pepper gardens in the next crop, which could lead to a decrease in the production area and output of pepper. However, this also presents an opportunity for Vietnam's pepper industry to restructure, focus on sustainable development, and promote production linkages with enterprises.

The European Union (EU) and Vietnam share a long history of cooperation on trade. The negotiations for the EU-Vietnam Free Trade Agreement (EVFTA) were concluded in December 2015. According to the EVFTA, pepper is one of Vietnam's key agricultural products entering the EU and is enjoying preferential tax rates since the EVFTA came into effect. However, besides the opportunities, there are still challenges, the biggest being meeting the strict quality market requirements, especially the Maximum Residue Level (MRL) on exported peppercorns.

The Socio-Economic Development Strategy (SEDS) 2011–2020 laid the foundation for Vietnam to become a "modern oriented industrial economy by 2020". Global economic integration remains a guiding principle under the SEDS. The SEDS 2020-2025 continues this work, stating objectives to effectively use free trade agreements, expand and diversify import and export markets, boost trade remedy capacity in line with international commitments, and set up domestic and international supply and value chains meeting product quality requirements and regulations on tracking product origins. Additionally, it aims to promote agricultural restructuring and develop a highly efficient rural and agricultural economy with a focus on sustainability and high technology.

The Intervention “Scaling sustainable production and trade of Vietnamese pepper” (VN Pepper) is a three-year intervention (01/01/2021 – 31/12/2023) funded by the European Union, under the ASEAN Regional Integration Support – Vietnam Trade-Related Assistance (ARISE + Vietnam), financed under the Development Cooperation Instrument, amounting to EUR 800,000, and implemented through a grant contract.

The Lead Partner for the implementation of the Intervention is Dutch Civil Society Organisation (CSO) Stichting IDH Sustainable Trade Initiative (IDH), who are also co-funding the Intervention with EUR 262,882, in a consortium with the Vietnamese Pepper and Spices Association (VPSA) and European Spices Association (ESA) to support Small and Medium Enterprises (SMEs) in pepper and strengthen all actors in the supply chain in the context of EVFTA.