The Free Trade Agreement between Vietnam and the European Union brings sustainable development opportunities for Vietnam’s timber processing industry
The EU is one of the five major export markets of Vietnamese wood products. The recent signing of the Vietnam-EU Free Trade Agreement (hereinafter referred to as the “Agreement”) will have a greater impact on the development of Vietnam’s timber export industry. “Made in Vietnam” wood products will enter the EU market at a more preferential tax rate than their competitors. Preferential tax rates will help Vietnam’s timber industry to obtain more orders with recognized quality.
The EU is Vietnam’s fifth largest export market for timber and wood products. Among the European Union countries, Britain is the largest importer of wood and wood products from Vietnam, followed by France, Germany, the Netherlands and other countries.
In order to ensure that the requirements of origin and sustainable development are met, Vietnamese wood products have the Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade between Vietnam and the European Union (VPA/FLEGT), which came into force on June 1, 2019. Because VPA / FLEGT is a strong signal of Vietnam’s commitment to the EU to promote the implementation of the EVFTA Agreement “Trade and Sustainable Development Projects”. The implementation of VPA / FLEGT will help to enhance competitiveness, promote trade activities between Vietnam and the EU in wood and wood products, and face transparent, legal and sustainable forest management market.
VPA / FLEGT, which has affirmed Vietnam’s commitment and determination to integrate into the international community in a deep and comprehensive way, has brought benefits to Vietnam in three areas: economy, society and environment. The most prominent one is to expand the export market. In particular, we will improve the forest management system, address illegal logging and forest trade, and contribute to the sustainable development of Vietnam’s export wood products industry.
Vietnam is making every effort to establish and put into operation the Vietnamese Wood Legality Guarantee System (VNTLAS) in order to ensure that Vietnamese wood and wood products have legal sources.
Meanwhile, the FLEGT certification and issuance mechanism of Vietnam’s timber legitimacy guarantee system will be put into operation. With FLEGT certification, the competitiveness of Vietnamese wood products will be enhanced, and enterprises exporting to the EU will not need to explain product traceability.
The European Union is also one of the main markets supplying logs to Vietnam. The main imported commodities include sawwood, logs and veneers. Belgium, Finland and Croatia are the EU countries that supply the most logs to Vietnam.
Wood imports from the EU are mainly oak, oak, cypress, walnut and so on. This is Vietnam’s second largest legal source of timber supply, after the United States, and Vietnam is facing the use of raw materials from clear sources.