Workers at a furniture manufacturing company in Bình Định Province. The UK – Việt Nam Free Trade Agreement is one the key drivers of growth in timber and wood product exports to the UK. — VNA/VNS Photo
HO CHI MINH CTY: The United Kingdom–Vietnam Free Trade Agreement is one of the key drivers behind the growth of Vietnam’s timber and wood product exports to the UK, industry experts say.
According to the Vietnam Timber and Forest Products Association, exports to the United Kingdom are expected to be worth US$230mil this year, up from US$195mil last year. In the first 10 months this year, they were worth US$182.1mil.
The association said the trade deal, which took effect in 2021, has positively impacted the wood industry with preferential tax rates that will move towards 0% in five years for all wood products.
Vietnam’s timber and wood products hold a competitive advantage over those from other countries exporting to the United Kingdom, it said.
Ngo Sy Hoai, the association’s deputy chairman and general secretary, said while exports to the United Kingdom are modest compared to overall exports – estimated at US$16bil this year – the United Kingdom is an important export market of Vietnam’s wooden products in Europe, accounting for 40% of the country’s exports to the European Union (EU).
“We view the UK market as a gateway to Europe. If we can export extensively to the UK, we can confidently enter other markets in the EU,” said Hoai.
“Vietnamese businesses have met these requirements successfully, with no safety warnings from this market.”
Increasing furniture exports to the United Kingdom could significantly contribute to the industry’s growth in the coming years, added Hoai.
The association’s deputy chairman added that globally, the UK ranks among the top five importers of wooden furniture.
However, Vietnamese furniture products have a very small share of that market, meaning considerable opportunities remain for Vietnamese exporters.
The UK’s accession to the Comprehensive and Progressive Trans-Pacific Partnership in 2024 should pave the way for even more opportunities, Hoai said.
Despite these opportunities, the association and Hoai caution about challenges when exporting to the market since it has strict environmental and quality requirements. To overcome these obstacles and take advantage of the opportunities arising from to the trade agreement, the department said Vietnamese wood exporters should adopt appropriate strategies and understand the UK market.
They should focus on quality and design, and on improving production technologies to meet the stringent requirements there.
They need to embrace a comprehensive transition towards sustainability, adopt digital marketing tools to enhance promotion and participate in trade fairs, particularly in the UK, to showcase their products and find new customers, he added.
According to Hoai, to further leverage the trade deal, Vietnamese businesses need to focus on product design and developing their brands.
Exports of wooden products with proprietary designs account for less than 10%, he said.
This has disadvantages and added value remained modest, he pointed out, adding that businesses should promote products with their own designs to improve value.
Some leading firms have invested in design and marketing, taking advantage of technological advancements in the digital era, he said.
While the UK is no longer part of the EU, many of the bloc’s regulations still apply in the UK.
For instance, the EU Deforestation Regulation is expected to be enforced similarly in the UK.
Businesses must prepare to meet traceability and accountability requirements to ensure their products do not cause deforestation or forest degradation, he said.
At a recent seminar, Vu Viet Thanh of the Industry and Trade Ministry’s European-American market department advised Vietnamese businesses exporting to the UK to thoroughly research market information and their potential partners to avoid fraud and scams.
According to experts, British businesses look for diverse and reliable sources for furniture supply.
By continuing to leverage the benefits of the agreement, Vietnamese manufacturers could solidify their market position in the UK, they added. — Viet Nam News/ANN
