Wood products for export at a factory of Truong Phat JSC in Phuoc Hoa Industrial Park, Phu Giao district, Binh Duong province. (Photo: VNA)Hanoi (VNA) – Vietnam and the European Union (EU)last week signed a landmark free trade deal that will slash tariffs on almostall goods, including wood and timber products. It is expected to give Vietnamesewood exporters better market access and more opportunities to expand theirbusiness.
The EU is among the top five buyers of Vietnamese wood andtimber products, accounting for 13 – 17 percent of Vietnam’s wood exports.
In 2018, Vietnam’sexport of wood and timber products reached a record value of 9.3 billion USD, 900million USD of which was to the EU. The UK was the largest EU importer whereVietnam shipped 36.2 percent of its exports, worth 289 million USD, followed byFrance, Germany and the Netherlands.
According to the EU-Vietnam Free Trade Agreement (EVFTA),the EU will eliminate duties on many Vietnamese wood and timber products. Forexample, duties on plywood and particle boards from Vietnam will be cut from 7percent to zero percent after five years while the 2 percent tariff on woodenkitchenware will be removed once the agreement comes into force.
Before the EVFTA was inked, Vietnam and the EU showed ajoint commitment towards the implementation of the deal’s “Trade andSustainable Development” Chapter, which includes provisions on sustainableforest management and trade in forest products.
In May, the two sides announced the completion of theprocess of approval and ratification of a Voluntary Partnership Agreement onForest Law Enforcement, Governance and Trade (VPA/FLEGT), which took effect onJune 1.
To implement theVPA/FLEGT, Vietnam is making efforts to develop a timber legality assurancesystem (VNTLAS) to ensure its exports of timber and timber products come fromlegal sources, including systems to verify that Vietnamese businesses were onlyimporting timber that had been legally harvested and traded, according to GeneralDirector of the Vietnam Administration of Forestry Nguyen Quoc Tri.
This means thatillegally harvested timber, as well as those businesses trading it, would notbe able to be part of supply chains regulated by the timber legality assurancesystem that Vietnam is putting in place.
At the same time,Vietnam will adopt a mechanism for granting FLEGT licenses when the VNTLASstarts to operate.
The steps areexpected to help the country enhance its competitiveness and boost wood exportsto not only the EU but also other markets as Vietnamese wood producers will nothave to waste time on proving the origin of their products.
On the other side,the EU is Vietnam’s second biggest supplier of legal wood materials, after the US.Last year, Vietnam imported 246.47 million USD worth of wood materials from theEU, up 5 percent from 2017. Imports mostly included oak, ash, beech and walnut.
Vietnam will benefit from wood materials imported from theEU and more importantly, Vietnamese producers will have opportunity to accessadvanced technology and high-tech machinery and equipment from the EU partnersto improve their productivity and product quality, said Nguyen Ton Quyen, VicePresident and General Secretary of the Vietnam Timber and Forest ProductAssociation (VIFORES).
At the same time, goods imported from the EU will putpressure on Vietnamese firms so they have to improve themselves, he noted.
The EVFTA is hoped to contribute to the sustainable growthof Vietnam’s wood processing industry and make it one of the country’s keyindustries with international prestige in the next 10 years, Tri added.–VNA
VNA
