Positive outlook for furniture exports to EU

Potential market

Bui Thi Thanh An, deputy director of the Ministry of Industry and Trade’s Vietnam Trade Promotion Agency, says export turnover of wood and wood products reached nearly US$7 billion in 2016, including nearly US$741.8 million to EU countries. Exports of furniture and handicrafts to the EU are forecast to grow this year due to the impact of EVFTA and the VPA/FLEGT.

According to the Handicraft and Wood Industry Association of Ho Chi Minh City, the wood industry reached export turnover of US$2.9 billion in the first five months of the year, of which exports to the EU countries accounted for about 10 percent of the total.

Miriam Garcia Ferrer, first counselor and head of the Economics and Trade Section of the Delegation of the European Union to Vietnam, said the EVFTA and the VPA/FLEGT will create favorable conditions for furniture and handicrafts to penetrate the EU market. Only Vietnam and Singapore among ASEAN nations have signed trade agreements with the EU, so competition is not fierce. In addition, after the EVFTA comes into force in 2018, Vietnam’s wood products and handicrafts will benefit from lower tariffs.

“Trade activities between Vietnam and the EU will double. Therefore, Vietnamese businesses need to quickly implement trade promotion activities,” Garcia Ferrer says.

Making most of opportunities

Vietnamese businesses must make careful preparations as the EU market requires high quality standards.

Bui Thi Viet Anh from the Institute of Policy and Strategy for Agriculture and Rural Development says the EU will require exporters to clearly prove origin of goods and ensure legal timber sources.

Nguyen Chanh Phuong, general secretary of the Handicraft and Wood Industry Association of Ho Chi Minh City, says that if furniture and handicrafts are able to enter the EU, it will be easily accepted in other markets.

Gellert Horvath, vice chairman of the European Chamber of Commerce in Vietnam, says Vietnamese businesses need to improve product quality, manufacture products with high economic value, and strengthen control of timber sources.