Deputy Minister of Industry and Trade: Need to have policies to ensure raw material sources for wood processing and export

Bright spot in export picture

Deputy Minister of Industry and Trade Cao Quoc Hung emphasized,Although the domestic and international economic situation has been significantly affected by the COVID-19 pandemic, our country's wood processing and export industry has still achieved strong growth, a bright spot in our country's export picture in 2020, contributing to maintaining export growth momentum in the context of domestic and international difficulties.

Deputy Minister of Industry and Trade Cao Quoc Hung speaks at the conference. Photo: Thu Huyen

In the first 10 months of 2020, the export turnover of the wood and forestry processing industry reached 9.78 billion USD, up 14.1% over the same period in 2019. The export value of FDI enterprises reached 4.56 billion USD, up 18.5% over the same period in 2019 and accounted for 46.7% of the export value of the wood and forestry processing industry in 10 months.

The Deputy Minister of Industry and Trade affirmed that the rapid growth rate of Vietnam's wood industry in recent times has greatly contributed to the openness of the domestic legal system along with new-generation Free Trade Agreements signed by Vietnam such as: CPTPP, EVFTA and RCEP Agreement.

Graphics: Lam Tung

New-generation Free Trade Agreements with high and comprehensive commitments will help enhance Vietnam's position in the world, helping Vietnamese wood enterprises approach the position of an important "link" in the existing wood product value chains with global customers, creating a positive spillover effect to potential buyers, promoting increased import and export of goods and services between Vietnam and many regions and countries.

TheFree Trade AgreementThe new generation aims to create an open, favorable, and transparent business environment for businesses in the fields of trade, import and export, services, and investment in wood product manufacturing. Regarding tax rates, countries that sign the Agreement often offer preferential import tax rates of 0% immediately or within 4-6 years for the Vietnamese wood industry; helping to improve the competitiveness of Vietnamese wood products with products from other wood exporting countries.

However, along with the above opportunities and advantages, the wood industry has, is and will face major challenges in the coming time due to objective and subjective factors.

Strengthening market opening and trade promotion

To promote the strengths and potential of the wood processing industry, and continue to maintain growth momentum in the coming years, the Deputy Minister of Industry and Trade proposed a number of solutions to promote wood processing and export.

Exported bamboo and rattan products produced by villagers in Nghe An from local forest products. Photo courtesy

Regarding market opening,trade promotion,Mr. Cao Quoc Hung said that the Ministry of Industry and Trade will continue to disseminate the benefits of these Agreements to support businesses in optimally exploiting the market. At the same time, the Ministry of Industry and Trade will also continue to support businesses in effectively implementing trade promotion programs to exploit large markets such as the United States, the EU, Japan, South Korea as well as emerging and potential markets.

Regarding ensuring raw materials for the wood processing industry, the Deputy Minister said that Vietnam needs to maintain an open import policy, creating conditions for businesses to import raw materials for production and export as well as having policies to ensure raw material sources.

Accordingly,Ministry of Industry and TradeRecommend that the Ministry of Agriculture and Rural Development soon have a plan to develop a stable source of raw materials for wood processing, while increasing the planting of large-scale timber forests to meet the demand for raw materials for the rapidly growing wood processing and export industry; consider exempting imported roundwood and sawnwood from phytosanitary measures when countries exporting wood to Vietnam have phytosanitary certificates to remove difficulties and obstacles for importing enterprises.

Traders buy planted wood in Thanh Chuong. Photo: Thu Huyen

In addition, strictly controlling trade fraud is a very important issue for the wood industry. In particular, the Voluntary Partnership Agreement VPA FLEGT, a part of EVFTA, will have a great impact on the Vietnamese wood industry in the coming time. The Ministry of Agriculture and Rural Development needs to promptly put the VPA/FLEGT Agreement into effect and strictly implement it; and control the import of wood in the CITES list according to regulations.

To improve the quality of human resources for the industry, we recommend that the Ministry of Finance and localities allocate funds for human resource training programs for the wood industry, trade promotion, and building and promoting the wood industry; the Ministry of Labor, War Invalids and Social Affairs prioritize the implementation of training programs, improving skills, ensuring human resource supply for the wood production and processing industry; support universities, colleges, and vocational schools in training interior and exterior design.

Deputy Minister of Industry and Trade Cao Quoc Hung

Regarding improving competitiveness, the Ministry of Industry and Trade will continue to monitor, urge and closely coordinate with ministries, branches and localities to focus on effectively implementing solutions to improve competitiveness, exploit existing advantages of the wood processing industry towards achieving the goals set out in Decision No. 1137/QD-TTg dated August 3, 2017 of the Prime Minister approving the Project to Improve the Competitiveness of Vietnam's Exports by 2020, with a vision to 2030.

Tuong Duong - Nghe An cajuput forest. Photo: Document

At the same time, coordinate with ministries and branches to enhance the exploitation of opportunities from FTA agreements by promoting widespread propaganda about FTA incentives, directions for taking advantage of FTA incentives and ways to take advantage of FTA incentives, guiding enterprises to clearly understand and grasp the rules of origin of importing countries; organize the issuance of Certificates of Origin of goods in the direction of modernization and electronicization, and strengthen the implementation of the self-certification mechanism of origin.

"The People's Committees of provinces and cities need to take advantage of opportunities from Free Trade Agreements (FTAs) and on the basis of advantages in natural conditions, labor, and local production to develop the production of key products and have plans to attract investment in the production and processing of these items for export; have appropriate and specific export orientations for local export products with strengths" - Deputy Minister of Industry and Trade Cao Quoc Hung suggested.