Wood exports impacted by EU deforestation regulations

Much room left

According to the Association of Vietnam Timber and Forest Products (Viforest), the EU is Vietnam’s fifth largest exporter of wood and wood products after the US, China, Japan and the Republic of Korea, accounting for 4.2 percent of the country’s total export turnover of these products.

Wood products have great potential for export to the EU

In the first quarter of 2023, the export value of wood products was estimated at US$1.87 billion, down 38.5 percent over the same period in 2022, of which wood furniture accounted for 56.5 percent. Apart from the US market, during this period, the export value of wood and wood products to the EU reached US$133.2 million, a year on year decrease of 37.1 percent.

Deputy Director of the Ho Chi Minh City Investment and Trade Promotion Center (ITPC) Nguyen Tuan said that although wooden furniture imports into the EU has increased sharply, furniture imported from Vietnam still accounts for a very small proportion, at around 1.9 percent last year. “Therefore, in the long run, the Vietnamese wood industry enterprises still have much room to expand their market share in the EU,” Tuan said.

New challenges

According to economic experts, the EU is a very demanding market in terms of strict import regulations and technical standards on product safety, building materials, or defense measures that cause difficulties and obstacles for the Vietnamese exports. Even when Vietnam has reached a Free Trade Agreement with the EU, the expansion of its market share in the EU depends on the competitiveness of Vietnamese enterprises in terms of product quality and prices, as well as their capabilities to meet technical standards and regulations on goods origin to enjoy incentives from the EVFTA.

Production of high-class wooden furniture for export

Particularly, the European Parliament has recently formally adopted a new law to fight global deforestation, which is expected to pose more challenges to Vietnam’s wood and wooden products exported to this market.

Ngo Sy Hoai, Vice President and General Secretary of the Viforest, said that Vietnam is a big wood furniture exporter, but also a major importer of wood materials in the world when over 1,200 enterprises import up to 322 types of wood materials from more than 100 countries every year. Therefore, the requirements for legitimate wood materials and the accountability for wood origins are the responsibilities of the wood industry.

In order to effectively take advantage of the EVFTA, Vietnamese exporters and manufacturers need to comply with buyers’ regulations. Their improved supplying capabilities will soon enable Vietnam to reach its wood and wood products export turnover target of US$25 billion.