Vietnam wood industry need to prepare for CPTPP?

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Vietnam wood industry need to prepare for CPTPP?

The development of wood material areas is a top priority for Vietnam's furniture industry when the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) takes effect.

In nearly 10 recent years, with a well-defined development strategy, Vietnam's wood processing industry has made great progress, the export turnover of wooden products and wooden products has always been in the Top of commodity groups. key exportation of the country.

Opportunities and challenges of Vietnam's wood industry

In 2017, Vietnam's total export turnover of timber and wood products reached about US $ 8 billion. In particular, wooden furniture export turnover reached 5.9 billion USD, accounting for 73.9% of total export turnover of wood and wood products of the whole industry. Vietnam's furniture export has always ranked first in the ASEAN region and maintained the 7th position in the world in the past 4 years. With the achievements of continuous export growth in recent years, the wood industry has contributed significantly in the enhancement of Vietnam's trade position on the map of international trade.

Joining the CPTPP is a great opportunity for Vietnamese trade, in which furniture businesses will be able to boost exports thanks to the very heavy tariff barriers currently removed.

According to the content of the negotiation in the CPTPP, the input materials for the furniture industry must originate from CPTPP countries and meet the certification of legal timber origin in order to enjoy the preferential treatment from the agreement. However, most of the wood materials for manufacturing export furniture of Vietnamese enterprises are either not in the CPTPP countries or from areas with high legal risks. Besides, before the US withdrawal from the TPP, there are many opinions that Vietnam's export furniture industry will not benefit because there is no US market, while competing with other countries in the region. field. However, this issue needs to be viewed from a more holistic perspective.

Firstly, the overall opening of trade markets with countries through an FTA will significantly increase the export of wood products, thereby predicting the participation in the CPTPP will have a certain impact on The export turnover of Vietnam's furniture industry even though there is no US participation.

Secondly, the reduction of import tax on wood products of the countries in the CPTPP will have an impact on promoting Vietnam's wood products to export to these countries. In both scenarios, whether the United States or the United States does not participate in the CPTPP, when the import tax on wood furniture falls, the export turnover of Vietnamese wood into these countries will increase. Of course, furniture exports will increase less without the US.

However, Vietnam still needs to have key solutions to promote the production and export of wooden furniture. As a result of forecasting the export turnover of Vietnamese wood furniture to the remaining CPTPP countries, it is still possible to grow with the tax rate decreasing when the CPTPP takes effect, even when the US is not participating.

Thirdly, on the domestic supply capacity, the increase in domestic wood material production supply will boost the export of furniture significantly to the CPTPP markets. This is also a key issue that needs to be overcome to solve the vicious cycle in Vietnam's furniture production, which is a supporting industry and the source of raw materials has not been proactive, so it is mainly processed according to customer designs provided by the Therefore, the supporting industry and raw material area are not developed, hence the export value is not high.

Therefore, this continues to affirm that the development of wood material area is one of the top points of attention for Vietnam's furniture industry if it wants to continue export growth, especially into CPTPP markets when the agreement. This is in effect.

Policy suggestions

In the coming time, Vietnam needs to focus on the following core issues in the process of developing solutions to prepare raw materials for wood processing for export:

Firstly, the work of forecasting the demand for material wood should be done in a methodical, scientific and detailed manner. Forecasting the demand for raw materials needs to be specific to the level of furniture production in the coming years, which types of wood will need and how much output will be needed to meet the demand. The criteria of quality and requirements for the production of raw timber also need to be made clear.

Secondly, for domestic raw materials, we need to specifically examine the availability of each type in the actual conditions of the country's raw material sources, from which there are specific policies in the afforestation process. , exploiting and exporting raw wood and fully utilizing domestic raw materials. However, restricting the export of those types, focusing on the development of domestic raw materials or the need to grow any kind of material wood can only be done if the forecast of material demand is presented. Basic, scientific and accurate.

Thirdly, the source of imported raw materials is still an important constituent of Vietnam's exported wooden products.

Therefore, the Government needs to create the most favorable conditions to import and supply wood materials for the wood processing industry to export wood products in such a way that they can meet the quantity, quality and time with competitive prices. . In particular, building a portal for wood materials is an important condition for businesses to refer to information about wood material sources, be more active in importing and avoid stockpiling raw materials in Time is too long.

Finally, with regard to the source of raw materials, with the requirement of origin of raw materials in CPTPP, it is imperative that wood processing enterprises have to use legal sources.

For imported raw materials, the trend of gradually reducing the proportion of imported wood materials in high-risk areas shows the right direction of Vietnamese enterprises. Therefore, the government's support in providing information on the origin of wood materials such as building a portal on wood materials will greatly support businesses in finding legal sources.

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