CPTPP provides opportunities for timber sector

08:58 | 03/05/2018 Trade

(VEN) - The recently signed trade agreement among Pacific Rim nations known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will provide added opportunities for the Vietnamese timber sector. Nguyen Ton Quyen, deputy chairman of the Vietnam Timber and Forest Product Association, spoke about the opportunities and challenges for the Vietnamese timber sector in an interview with Vietnam Economic News’ Hanh Nguyen.

cptpp provides opportunities for timber sector

How do you assess the export picture of the Vietnamese timber sector?

In 2017, export turnover of forest products reached US$8 billion, including nearly US$7.7 billion from wood and wood products and the remaining from non-timber forest products such as bamboo, rattan and sedge. In particular, the export of artificial board products grew significantly, reaching over US$4 million, with most of the raw materials coming from domestic plantations.

Positive results have helped the timber sector complete its goal three years earlier than the target set out in the program for sustainable forest development for the 2016-2020 period, and wood and wood products rank sixth on the list of the country’s largest export items.

The impressive growth of the Vietnamese timber sector in 2017 was attributed to a fall in the competitiveness of the Chinese wood sector as hardwood plywood from China was being subsidized and dumped in the US market. In addition, the 2008-2009 economic recession in Europe reduced production capacity, creating favorable conditions for the Vietnamese timber sector to increase exports to the continent. Moreover, labor shortages and high labor costs in China, Malaysia and Indonesia - countries engaged in processing wood products for exports, have also offered development opportunities for the Vietnamese timber sector.

What opportunities does the CPTPP open up for the Vietnamese timber sector?

The effect of the CPTPP will bring the tariffs down to zero percent and Vietnamese wood businesses will be able to buy advanced machinery and equipment from developed countries such as Japan and Australia instead of purchasing cheap equipment from China and Chinese Taipei.

CPTPP member countries are also very powerful in forestry. Therefore, Vietnamese wood businesses can learn from their partners’ experience, especially in the production of legal timber.

cptpp provides opportunities for timber sector

Intellectual property is one of the strictest requirements of the CPTPP. How does this affect the timber sector?

The Vietnamese timber sector will face a real challenge. The awareness of businesses and state management agencies of intellectual property in the timber sector remains limited. For example, in terms of design, most Vietnamese wood businesses have produced products according to foreign samples. To have their own designs, domestic businesses have to build their brand names and establish their own intellectual property. The Vietnamese timber sector should start from now on to develop a roadmap and understand intellectual property rights and their benefits.

What challenges are businesses facing? What should they do to make most of the CPTPP?

In addition to the intellectual property issue, understanding legal timber is also a matter of concern. For example, when I asked an afforestation household in Yen Bai Province, they did not know about legal timber. Vietnam does not yet have an afforestation association to help forest owners understand legal timber. Therefore, the early establishment of such a grouping is necessary.

The linkage between businesses and afforestation households is important because it will resolve three basic problems: meeting the supply of wood materials, ensuring the origin and traceability of wood, and harmonizing interests between the parties.

The CPTPP will open up opportunities for the Vietnamese timber sector to export its products to member countries.

Hanh Nguyen