EVFTA exploitation important for wood exports

06:00 | 11/07/2023

(VEN) - Efficient branding development and exploitation of the EU-Vietnam Free Trade Agreement’s (EVFTA) tariff incentives will help the Vietnamese wood and wood product industry develop sharply in the next several years.

Processing wood products for export

The wood and wood product industry currently enjoys relatively low import taxes of the EU, with the taxes on many wood products having been zeroed out and will be zeroed out in the next five years. This helps Vietnam maintain its competitiveness over countries that no longer enjoy the Generalized System of Preferences (GSP), such as Malaysia and China.

Technical barriers are an important part of bilateral and multilateral free trade agreements. The EVFTA has a chapter titled “trade and sustainable development” referring to labor and environmental technical barriers with which investors in and exporters to Europe must comply.

Vietnamese businesses need to thoroughly understand and fully implement EVFTA commitments if they are to overcome the agreement’s environmental technical barriers and increase exports to the large, potential EU market.

Under the EVFTA, Vietnam and the EU recognize the importance of conservation and sustainable management of forest resources benefiting economic, environmental and social goals.

Vietnam has replaced its 2014 Law on Environmental Protection with the 2020’s version in accordance with the EVFTA’s environmental commitments. In 2021, the Vietnamese Government issued Decree 102 as Vietnam Timber Legality Assurance System (VNTLAS) for exports and imports.

According to the Vietnam Timber and Forest Products Association (VIFORES), after many years of continuous rapid growth, in the first five months of 2023, the export turnover of timber and wood products reached US$4.7 billion, down nearly 30 percent compared to the same period last year. The EVFTA has created competitive advantages for Vietnamese wood exporters in the context of the difficult global economy. The agreement has helped institutional reform, create a transparent and fair competition environment, and increase the trade in goods between Vietnam and the EU.

The wood and wood product industry is expected to face further difficulties in 2024, and the sector’s businesses need to make a full use of EVFTA opportunities and meet the agreement’s origin of raw material regulations.

The European Council has ratified the EU Deforestation Regulation (EUDR). Under the regulation, products that have been made from forest degradation-inducing wood would be banned from EU markets. Even wood collected from reforested land would be no exception. The EUDR would take effect around December 2024 and January 2025. Microenterprises and small enterprises would have an additional six months to comply with the regulation's requirements. Apart from coffee and rubber, wood and wood products are Vietnam’s staple goods for exports subject to this regulation.

Ha Huong

Article URL: https://ven.congthuong.vn/evfta-exploitation-important-for-wood-exports-48097.html

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