Vietnam's wood exports grow in anticipation of UKVFTA
Vietnam's wood exports grow in anticipation of UKVFTA
Vietnam's wood exports to the UK are expected to grow strongly as the two countries have recently concluded the UK-Vietnam Free Trade Agreement (UKVFTA).
The UKVFTA will likely boost wood exports to the UK
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The UKVFTA will see 99 per cent of tariffs between the two countries eliminated over the course of seven years. According to the Import and Export Department of the Ministry of Industry and Trade of Vietnam, Vietnam's wood sector will reap significant benefits from the UKVFTA.
Currently, Vietnam is one of the UK’s largest wood and wooden product exporter. In 2019, Vietnam was the UK’s sixth-largest wood and wooden product exporter with the export turnover reaching 421.8, accounting for 3.6 per cent market share of the UK's wood and wood product imports. According to data from the International Trade Center (ITC), the leading exporters of wooden furniture to the UK are China, Italy, Germany, Poland, and the US.
Once the UKVFTA comes into effect, many Vietnamese wood and wood products are subjected to zero per cent tax rate within five years. Therefore, Vietnam's wood industry will enjoy tremendous benefits from this agreement.
Furthermore, Vietnam has many opportunities to increase the export of wooden products to the UK, thanks to their highly-competitive prices, good raw materials, and high product quality. In addition, a number of major companies in the wood industry in the UK already have production facilities or signed long-term partnership contracts with manufacturers in Vietnam such as IKEA, the largest furniture retailer in the UK. The UKVFTA is expected to make Vietnam more attractive to foreign investors to invest in Vietnam’s wood processing industry.
Despite the impact of the COVID-19 pandemic, the wood and wooden product sector have enjoyed good growth. In the first 11 months of 2020, the sector witnessed an increase of 14.1 per cent over the same period last year, reaching $10.88 billion.
