VCN- The Government’s promulgation of Decree 102/2020/ND-CP on the Vietnam Timber legality assurance system and the effectiveness of the Vietnam-EU Free Trade Agreement (EVFTA) (from August 1, 2020) will boost timber exports to the EU market in the near future.
The forest industry said the export turnover will reach more than US$12 billion in this year. Photo: N.T
FLEGT license will be issued by the end of 2021
The Voluntary Partnership Agreement on Forest law enforcement, Governance and Trade (VPA-FLEGT) between the Government of Vietnam and the EU took effect from June 1, 2019.
However, the most important thing in implementing the agreement is to internalise the regulations. Vietnam has proposed not to directly apply the agreement, but through the issuance of an additional decree regulating the Vietnam Timber legality assurance system (VNTLAS) to focus on the following contents: control of imported goods, organisation/ business classification system, export verification, assessment of readiness of VNTLAS and the FLEGT licensing for the EU.
On September 1, the Prime Minister issued Decree No. 102/2020/ND-CP on the Vietnam Timber legality assurance system with specific regulations.
It can be affirmed that the promulgation of the decree is one of the important steps in the internalisation of the commitments of the VPA/ FLEGT.
Nguyen Tuong Van, Deputy Director of Science, Technology and International Cooperation Department (Vietnam Administration of Forestry under Ministry of Agriculture and Rural Development), said after the decree took effect, the management for imported timber must be applied as per the provisions in the decree, meanwhile the classification of enterprises only can be conducted after six months.
“By the beginning of 2021, Vietnam will be able to operate theVietnam Timber legality assurance system. Experience shows that by the end of 2021 and early 2022, the first FLEGT license will be issued,” Van said.
Increase timber exports to the EU
The main content of the VPA-FLEGT is that Vietnam commits to build and operate the Vietnam Timber legality assurance system in accordance with Vietnam's supply chain characteristics and with EU regulations to verify and trade timber in the supply chain as a basis for the Vietnamese competent authority to issue FLEGT licenses for Vietnam's wood and wooden product shipments to the EU.
Vietnam's wood and wooden product shipments with a FLEGT license will not be required to present alegal timber origin when exporting to the EU.
This means the FLEGT license will replace a series of documents that Vietnamese wood and wooden product exporters must submit to the EU importers to prove their legal origin.
Talking to Customs News, Pham Van Dien, Deputy Director of Vietnam Administration of Forestry said the promulgation of Decree 102/2020/ND-CP is a key step to internalisethe commitments of the VPA/FLEGT; combined with the EVFTA to be a driving force to promote timber exports to the EU.
“The EU market pays attention to goods origin, transparency and environmental friendliness of the products. The implementation of VPA/FLEGT requires Vietnam to prove the legal origin, combine with opportunities from tariff incentives brought by the EVFTA, I believe the wood industry will be more promising in the EU market,” Dien said.
Ngo SyHoai, Vice President and General Secretary of the Vietnam Timber and Forest Products Association said in recent years, timber export turnover to the EU market is US$1-1.2 billion/year. This is a key market because it includes a coalition of countries with high standards.
Vietnam mainly exports products to the EU likeinterior and exterior refined wooden products with high added value. With the VPA/FLEGT, although export volume of wood products to the EU cannot increase dramatically, export value expects to be increased and achieved positive results.
“Notably, in addition the effect the export of wood products to the EU market, the signing and implementation of the VPA/FLEGT will help Vietnam's timber industry improve its reputation and gain trust in other markets like the US and Japan,” Hoai said.
Dien added that in the near future, the Vietnam Administration of Forestry recommends enterprises continue promoting sustainable, efficient and modern wood processing and export industry based on deep integration into international and regional markets; and use legal materials.
Enterprises should also useadvanced technology and techniques, strive to bring the export value of forest products to US$12.5 billion in 2020 and US$20 billion by 2025.
From the beginning of the year to the end of August, export turnover of forest products reached US$7.83 billion, increasing by 10.3% year-on-year, accounting for 29.9% of export turnover of agricultural sector. Of which, export turnover of wood and wooden products was estimated at US$7.32 billion, increasing by 9.6%; export turnover of forest products excluding wood reached US$511 million, increasing by 21.6%.
In the first eight months of 2020, Vietnam’s major wood and forest products export markets are the US, Japan, China, the EU and Korea with the total export turnover of US$7 billion, accounting for 89.5% of the Vietnam’s export turnover of forest products.
By Thanh Nguyen/Ngoc Loan