Industry insiders talk Brexit’s effects on Vietnamese wood sector

17:03 | 19/07/2016 Trade

Industry insiders discussed the impacts of Britain’s exit from the European Union (EU) on the Vietnamese wood sector during a workshop in Hanoi on July 14.

Industry insiders talk Brexit’s effects on Vietnamese wood sector

Industry insiders at the workshop - Photo: baocongthuong

The event was jointly held by the Vietnam Good and Forestry Product Association (VIFORES), Ho Chi Minh City Fine Arts and Timber Processing Association, Forest Products Association of Binh Dinh (FPA Binh Dinh), and international Forest Trends.

According to the VIFORES, Vietnam is one of the three biggest wood exporters to the UK besides Indonesia and Malaysia. The UK is also the largest EU importer of Vietnam’s timber products.

In 2015, Vietnam exported wood and timber products worth about 900 million USD to the EU, including 270 million USD to the UK which singly made up 4 percent of the total timber export turnover of Vietnam.

Secretary General of the FPA Binh Dinh Tran Huy Le said the UK is the second most important market (after Germany) for wood companies in the central province of Binh Dinh.

That the UK left the EU had impacts on businesses’ orders, he said, noting that some customers demanded to cut prices by 5-7 percent while some asked to reduce the number of orders.

To Xuan Phuc from Forest Trends said Brexit caused devaluation of the pound, which negatively affects Vietnam’s wood export prices. Additionally, the decreasing demand in house construction in the UK will directly impact on the Vietnamese wood sector, he added.

The volume of timber products imported from Vietnam to the market is likely to reduce in the future, he said.

The UK has pioneered in implementing the EU Timber Regulation (EUTR) and negotiating the Voluntary Partnership Agreement (VPA) under the Forestry Law Enforcement, Governance and Trade (FLEGT) for countries exporting tropical timber products to the EU, experts said, adding that Brexit does not affect the FLEGT VPA negotiation between Vietnam and the EU.

Phuc suggested businesses update information and map out solutions to deal with different market scenarios because there would be changes on tax, exchange rate, customs fees and procedures in the future.

According to the Ministry of Industry and Trade’s Department of Import and Export, Vietnam’s goods exports to the UK make up about 2.9 percent of the total export turnover, so Brexit will not affect much on the exports of Vietnam./.


Source: VNA