Surge in woodwork exports Stateside raises concerns

Although Vietnam’s wood and wooden product exports to the United States in the first quarter of the year increased by over 34% year-on-year, insiders have expressed concern over tighter control measures potentially being applied to Vietnamese imports, triggered by the recent influx of Chinese wood processors into the country.


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Woodwork exports surge

Workers at a wood processing factory. Experts have expressed concern over the United States’ tighter control measures that may apply to Vietnam’s woodwork imports

According to a report by the Agro Processing and Market Development Authority of the Ministry of Agriculture and Rural Development, the agriculture sector reported a year-on-year decline of nearly 3% in export revenue in the first three months of the year, reaching US$8.8 billion.

Meanwhile, Vietnam exported US$2.3 billion worth of wood and wooden products in the period, up 15.6% over the same period in 2018.

Moreover, the wood sector enjoyed the highest trade surplus among agricultural products in quarter one, at US$1.02 billion.

The United States, Japan, China and South Korea remained major importers of Vietnamese wood and wooden products, making up nearly 80% of the total. The U.S. market posted the highest growth.

According to the Agro Processing and Market Development Authority, the trade war between the United States and China has ushered in opportunities for the local wood sector, as Vietnamese products are more competitive than similar products from China, which are subject to the United States’ high tariffs.

Dien Quang Hiep, chairman of the Binh Duong Furniture Association, stated that the United States is one of the largest buyers of Vietnamese furniture, while China supplies a large volume of wood materials for Vietnamese wood processing firms.

The trade tension between these two countries will benefit Vietnam’s wood sector as the United States will seek Vietnamese partners to replace Chinese ones, while China will find it hard to sell wooden products to the United States and will have to ship raw wood to Vietnam.

Hiep, who is also the director of a firm exporting furniture stateside, noted that his company has set a target to increase its revenue by 10% to reach US$22 million this year.

Concerns

Despite opportunities, the U.S.-China trade war may put made-in-Vietnam wooden products in danger of rejection.

Last year, the total volume of Vietnamese plywood and laminated wood shipped stateside surged threefold from a year earlier, according to the Vietnam Timber and Forest Product Association. There was evidence to suggest that Chinese plywood had been sent to Vietnam before being exported to the United States with made-in-Vietnam labels.

Domestic wood processing enterprises complained that Chinese firms have recently rushed to open factories in Vietnam, especially in Binh Duong and Dong Nai Province.

According to the “Foreign investment in Vietnam’s wood export” report issued by the non-profit organization Forest Trends in February, the number of Chinese firms investing in Vietnam’s wood sector is the second largest, after Taiwan, with 161 firms. More than half of these firms process wooden products for export.

To Xuan Phuc, a policy analyst at Forest Trends, remarked that nearly 30 Chinese enterprises have registered each year to operate in Vietnam since 2013, which is equivalent to the total in the 2000-2010 period.

The Agro Processing and Market Development Authority has announced that the United States has conducted investigations into tax evasion by some Chinese companies that have attached made-in-Vietnam labels to their plywood products before shipping them to the U.S.

More probes may be launched this year, the authority stressed.

Thus, the U.S.-China trade war may not only bring in opportunities but also risks as Vietnam may become a transit point for Chinese goods. As a result, Vietnam’s wooden products may be subject to the United States’ antidumping and antisubsidy probes or stricter import requirements.

SGT

Surge in woodwork exports Stateside raises concerns, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news
 
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