Vietnam timber industry to benefit from the FLEGT-VPA

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Vietnam will considerably export more wooden products to Europe and other markets once the EU-Vietnam Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade (VPA-FLEGT) comes into force, according to some officials.

Vietnam and the EU concluded the VPA negotiations in May, and the forest pact would increase the competitiveness of Vietnamese timber products compared to those from countries that do not have much control over the forestry sector, as reported by Vietnam Plus.

Jana Herceg, deputy head of the trade and economic section of the Delegation of the European Union to Vietnam, explained that Vietnam is the second country in ASEAN after Indonesia to conclude this agreement. So when the VPA-FLEGT agreement takes effect, it would further boost the export of furniture products.

Herceg added that the consumers in Europe want to know about labour conditions and corporate social responsibility standards, so if the Vietnamese companies understand consumers demand and meet these conditions, they have the opportunity to boost exports to Europe.

“Once you have the products you have to make sure that people know about your products, you need to have good marketing and good branding,” she added.

Enterprises also face trade barriers and intense competition from other exporters to the market, which require them to improve quality, access to information and competitiveness. They need to ensure legal timber sources by increasing import of raw materials from low-risk countries, connecting with importers in developed countries, and investing in timber growing in Vietnam, Vietnam Plus reports.

Nguyen Chanh Phuong, deputy chairman of the Handicrafts and Wood Industry Association of HCM City, said that, besides branding, product design and price are two important factors in the competitiveness of the wooden sector. European consumers’ habits are changing, and exporters need to catch up on these trends, he said.

Johannes Schwegler of the Swiss Import Promotion Programme added that there is an emerging trend of using laminated flooring and bamboo products as substitutes for tropical timber because of their environmental-friendliness and technical properties. So solid wood-based products, which are the strength of Vietnamese firms, still have opportunities for growth, but Vietnamese firms should keep abreast of market trends, he said.

Currently, the EU is the fourth largest importer of Vietnamese wood and wood products. It is also one of Vietnam’s timber suppliers.

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