Vietnam and the US are working on a new agreement to target illegal logging in the furniture industry.
Held in Washington DC on August 22 and 23, representatives from the two governments participated in the ‘Timber Working Group’ with both delegations optimistic that an agreement on ‘Illegal Logging and Timber Trade’ could be signed.
In October 2020, the US government raised concerns about Vietnam’s Timber Legality Assurance System after furniture imports were identified as coming from an illegal source.
At the time, US Trade Representative Katherine Tai said, “Illegal timber in the supply chain damages the global environment and the natural resources on which we all depend, and is unfair to US workers and businesses who avoid such timber.”
The matter was resolved in October 2021 when the US reached an agreement with Vietnam that addressed concerns regarding the use of illegally harvested timber.
The US has been Vietnam’s largest export market for furniture
Before the concern, the US was Vietnam’s largest export market for hardwood furniture – accounting for more than 30% of Vietnamese trade in furniture products.
The PM is pushing for increased competitiveness in processing, post-harvest, and market development to address a decline in forestry-fishery exports.
In Washington, the working group was co-chaired by Vietnamese Deputy Minister of Agriculture and Rural Development Nguyen Quoc Tri.
The US delegation was led by Assistant US Trade Representative for Environment and Natural Resources Kelly Milton.
Vietnam’s forest sector faces several challenges, including dependence on imported raw materials, reduced demand and increased competitiveness in significant markets, including the United States, Europe, and Japan – which accounts for just under 90% of total exports for forest products.
At the meeting, Vietnam updated the US on the steps taken by Vietnam to implement the agreement.
These include reviewing and eliminating financial incentives for the timber processing sector and enhancing the customs control and examination of imported timber.
Vietnam made a commitment to reducing deforestation in supply chains
In light of the push by the EU to implement its Deforestation Regulation, the Vietnam delegation also committed to boosting cooperation with material timber exporting countries.
It will amend legal documents to improve monitoring and surveillance of illegal timber and control the seized wood so it doesn’t enter supply chains.
Vietnam relies heavily on imported hardwoods, with 5 to 6 million cubic metres imported from more than 100 countries annually.
Not only does this leave the country vulnerable to volatility in the global supply of timber, but it also leaves it at greater risk of ‘high-risk’ legality concerns.
In 2020, US-based Mongabay reported that at least one-third of tropical hardwoods imported for Vietnam-manufactured products are from “high-risk” locations.
In recent years, experts have pushed the government to focus on building the capacity of micro, small and medium-sized enterprises (MSMEs) and domestic plantations, most of which are operated by smallholders.
Vietnam produces more than 20 million cubic metres of plantation wood, but it is rarely used for furniture because plantation timber, such as acacia, is deemed inferior to hardwoods.
Consequently, most of the timber is exported as woodchips.
Vietnam has identified the forestry sector as essential to its net zero commitments, with Vietnam committed to reducing methane emissions by 30% as part of its COP26 commitments.