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December 23, 2020

Vietnam’s wood exports to hit another record in 2020

Vietnam’s wood exports to hit another record in 2020

Vietnam's wood export turnover this year is expected to reach a record high of nearly US$12.5 billion despite impacts of the Covid-19 pandemic as well as risks from export markets and the country’s policy changes in controlling the legality of imported wood materials.

Chairman of the Vietnam Timber and Forest Product Association (VIFOREST), Đỗ Xuân Lập, made the statement at a conference held online both in Ha Noi and HCM City on Monday (Dec 21).

Lập said the wood sector was confident of achieving the target thanks to a surge in the product’s exports, especially in the second and third quarter of the year.

In the first 11 months of 2020, the wood sector’s export turnover reached more than $11 billion, representing a 15.6 per cent year-on-year increase.

The Government said the wood industry has been one of the leading sectors contributing to the increase of export turnover of the country’s agro-forestry products.

Relating to risks from export markets, Vietnam's wood industry is facing trade tensions among big countries around the world.

The local industry has faced anti-dumping lawsuits from the US and South Korea, specifically for plywood related to commercial fraud and tax evasion. Plywood is not the only item. There are still a number of Vietnam's export products with great risks in the future, he said.

Most recently, the US Trade Representative accused the Vietnamese timber industry of using illegal timber in the domestic market and in products exported to the country. The risk that the US Government applies trade restrictions on these Vietnamese timber could be very high.

The chairman added that Vietnam, has changed policies as it promulgated the decree on Vietnam, Timber Legality Assurance System (VNTLAS). The decree regulates the harvest, transportation, trade, and processing of timber in accordance with requirements and regulations of international conventions that Vietnam is party to and requirements of countries that import processed wooden products from Vietnam.

The Ministry of Agriculture and Rural Development (MARD) issued a decision on a geographic origin and timber species risk category. This plays an important role in controlling the legality of imported timber.

Phùng Gia Đức, deputy head of the Foreign Trade Defence Handling Division under the Ministry of Industry and Trade’s Department of Trade Defence said Việt Nam has faced a total of 199 cases so far.

In the past five years, there were 97 commercial defence investigations. The most surveyed markets are the US, India, Turkey, Australia, Canada, the EU and the Philippines. In 2020, Vietnam, is under investigation in a total of 37 cases.

The investigations were related to tax evasion on plywood products and anti-dumping for MDF wood.

To avoid anti-dumping and anti-tax evasion investigations, Đức said that local businesses need to have knowledge about trade defence.

They must understand the true nature of this tool in order to have the right responses. When exporting to a certain market, they should have information from importers.

As soon as information about anti-dumping investigations is available, businesses must take action to respond. The ministry will issue warnings to support businesses. In addition, it is necessary to have controls on the value and volume of exports to that market to get the lowest tax rate.

“Information is extremely important. Getting the information early will solve many problems. Currently the Ministry of Industry and Trade has an early warning mechanism. In the last two quarters, we continuously update wood products that are at risk of being sued, ” he added.

Phan Mai Quỳnh from the Self-Defence and Damage Investigation Department said before any incident occurs, exporters need to update the early warning list of the Trade Defence Department; and find out about the trade defence regulations of the investigating country. Meanwhile, they were asked to diversify their products, focus on high quality products and promote market diversification.

“It is necessary to monitor the goods imported into Vietnam, and at the same time use trade remedies to protect the domestic manufacturing industry. If there is a careful preparation, it will overcome the barriers of anti-dumping investigation from other countries, ” she added.

The conference provided exporters and producers with trade defence skills, issues related to commercial fraud in import and export activities, goods origin fraud to reduce risks in their trading.

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