VPA / FLEGT comes into force: Timber to the EU is unlikely to be breakthrough

	VPA/FLEGT: A breakthrough in timber exports to the EU?
	Vietnamese wood exporters to Europe number more than 400
	Wood exports hit US$3.3 billion in 5 months

In the next few years, the export of timber and timber products to the EU may exceed $US1 billion. Photo: N.Thanh

Not change in the short term

According to the General Department of Forestry (Ministry of Agriculture and Rural Development), timber and timber products and forest products are an important export product of Vietnam and have continuously grown over the last decade. Export turnover of timber and timber products increased from $3.4 billion in 2010 to over $9.3 billion in 2018, ranking second in Asia and fifth in the world. Regarding exports, the EU is one of the five largest timber and timber product export markets of Vietnam.

Evaluating VPA/ FLEGT Agreement, Bruno Angelet, Ambassador, Head of EU Delegation in Hanoi gave evidence: Indonesia is the first country to sign VPA/ FLEGT Agreement with EU in 2016 and Ghana is the second country. Indonesia's export of timber to the EU in 2017 - 2019 has grown strongly and stably. Vietnam is the third country in the world to ratify the VPA/ FLEGT Agreement. While Indonesia only produces timber with domestic materials, Vietnam is currently an importer of raw wood from 40 other countries. Therefore, Vietnam is much more favourable and promising than Indonesia. "In addition, Vietnam and the EU have signed a bilateral trade agreement on economics, while Indonesia has not. This is also a great advantage of Vietnam in exporting legal timber and timber products to the EU,” stressed Angelet.

In response to the Customs Newspaper's report on promoting the export of timber and timber products thanks to the VPA/ FLEGT Agreement, Deputy Minister of Agriculture and Rural Development Ha Cong Tuan said: 10 years before the EU did not have 28 countries as it is today, now the EU accounts for nearly 20% of the total of about $ 3.4 billion of Vietnam's timber and timber products exports. In 2018, Vietnam exported timber and timber products worth over $9.3 billion, the EU accounted for only about 15% but the absolute value increased. "I believe that VPA/ FLEGT will promote trade in timber and timber products between the two sides. In particular, the Vietnamese wooden furniture brand will have a better reputation not only in the EU market but also globally," Deputy Minister Tuan said.

The VPA / FLEGT Agreement comes into force on June 1. It is fair to wonder where Vietnamese timber and timber products will expand into EU right from the 1st of June. Talking to the Customs News’ on this issue, Nguyen Ton Quyen - Vice President and General Secretary of Vietnam Timber and Forest Product Association assessed: This is impossible, because there is so much thing in preparation. It is expected that by the end of 2020, early 2021, the FLEGT license for exporting wood from Vietnam to EU may be granted. Thus, from 2021, the export of wood products into the EU market may have a breakthrough thanks to the VPA/ FLEGT Agreement.

Double in the next few years

In the near future, it is impossible to see the significant change in the export of timber and timber products to the EU. However, Nguyen Ton Quyen further said: the EU is an extremely important market for Vietnamese wood. In the long term, the signing of the VPA/ FLEGT Agreement will help export timber products directly into 28 European countries without going through an intermediate country. "It is predicted that in the next few years, timber export turnover to the EU may double, from the current $ 700 million to over $1 billion. Importantly, the VP / FLEGT Agreement will help Vietnam improve institutions on forest management, solving illegal timber exploitation and trade, contributing to sustainable development of wood processing industry,” Quyen said.

On the VPA/ FLEGT Agreement, Nguyen Quoc Tri-Director General of the Forestry Department added: The main content of the VPA/ FLEGT Agreement is that Vietnam committed to building and operating a timber legality assurance system in accordance with Vietnam's supply chain characteristics and EU regulations to verify and trace timber in the entire supply chain as a basis to Vietnamese authorities to issue FLEGT licenses for the export of Vietnamese timber and timber products to the EU.

Vietnam's timber and timber products shipments with FLEGT licenses will not have to carry out explanation of legal timber origin when exported to the EU. This means that the FLEGT license will replace a lot of papers that Vietnam’s timber and timber product exporters are now required to submit to EU importers to prove their legal origin. The commitments of the VPA/ FLEGT Agreement and the provisions of the Law on Forestry in 2017prohibit illegal import, export, exploitation, processing and trade of timber.

To implement the agreement, Vietnam is making efforts to finalise legal documents to incorporate the commitments of the VPA/ FLEGT Agreement, including the development of a decree on timber legality assurance systems. "Under the plan, this Decree will be submitted to the Government for promulgation by the end of 2019. The parties also agreed to establish a Vietnam-EU Joint Implementation Committee (JIC) to monitor and evaluate the full implementation of the Agreement's commitments, a process that may last for several years,” Tri said.