My Tai Co. Ltd’s employees are at work.

The EU is the second largest export market of Vietnam’s wood and wood products only after the U.S. Export to the EU in the last two years was valued at more than US$750 million on average and wood exports to the EU earned US$475 million in the first nine months this year.

The market for wooden furniture has showed signs of recovery since early this year. The export turnover value of Vietnam’s wood and wood products in the EU market has quickly grown in the first nine month of 2010, such as US$76.7 million in Germany, US$48.3 million in France, and US$134 million in England. These figures prove that Vietnamese woodwork exporters see the EU as a traditional and key market.

The EU market doesn’t require any import license for forest products while its tax regulations are not so strict. Also, the Generalized System of Preferences plays a role in the tax reduction and exemption for developing and poor countries, including Vietnam.

How about difficulties?

Vietnamese exporters have experienced some difficulties in exporting to the EU market in recent years as many regulations on forest products and wooden furniture were put into operation, such as ban on the use of toxic chemicals and FLEGT.

The woodwork’s export turnover, thus, has decreased recently. The 2008’s figure, for example, reduced by 34 percent against the previous year and last year’s export turnover went down by 39 percent.

Could you reveal the main contents of FLEGT?

Illegal logging causes environmental damage and undermines the competitiveness of legitimate forest operations in both exporting and importing countries. The European Commission, thus, adopted the Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan in May 2003.

At the core of the Action Plan are Voluntary Partnership Agreements with timber-producing countries that wish to eliminate illegal timber from their trade with the EU. It is a part of an EU action plan with exporting countries like Vietnam to eliminate illegal timber from trade with the EU. These agreements will allow for the identification of legal timber through the issuance of FLEGT licenses.

According to experts, FLEGT will greatly affect Vietnam’s wood product exports as Vietnamese wood products use up to 70 to 80 percent of raw materials imported from foreign countries. The agreements are voluntary, but Vietnamese exporters will find difficult to penetrate into the EU market if they have no FLEGT certificate when it takes effect.

How about the talks on voluntary partnership agreements between Vietnam and EU?

The representatives of Vietnamese bodies have been holding talks with European senior officials on voluntary partnership agreements that focus on production and trade of processed wood products.

At the first round of talks, due November 29-30, European officials discussed management of timber production and trade introduced by their Vietnamese counterparts through their negotiations. The goal is to assure legality for timber products and compliance with the FLEGT agreement.

The negotiations are expected to be concluded by mid-2012 and official enforcement of the agreements will begin in 2013 when FLEGT comes into force throughout the EU.

What woodwork exporters must pay attention to when exporting into EU?

Vietnamese exporters should follow three steps, including: market evaluation, business evaluation, and strategic activities. They need to take full advantage of their opportunities and deal with possible risks. Preparing for facing the severe competitiveness is also vital.

The businesses must plan their exports in detail. Also, they have to evaluate markets in advance and select an independent consultancy firm. The businesses need to focus on some factors, such as facilities, quality, employees, financial capacity, and experience.

• Viet Hien