Asia's No.1 Free-To-Trade Furniture Export-Import Magazine for the Global Markets

Industry News  

Vietnam Wood Export To Us Grows

VIETNAM: As Vietnam’s largest export market for timber and wooden furniture, the US market generated $2.64 billion in export value in 2015 which accounted for 39 percent of Vietnam’s total export value for this sector. This number is predicted to double after the enforcement of the Trans-Pacific Partnership Agreement, reported Vietnamnet.

Vietnam’s timber and wooden furniture exports to the US earned only $16 million in 2001 and shot up to $116 million in 2003 after the Vietnam-US Bilateral Trade Agreement(BTA) came into force. The wood exports to Vietnam has increased exponentially since, making $1 billion in 2008, and $2.64 billion in 2015. Since the BTA, wood exports to the US market have leapt 165 fold.

The general secretary of the Vietnam Timber and Forest Products Association (Vinafores), Nguyen Ton Quyen, said that US is the priority market for Vietnamese timber and wooden furniture items.

“Made-in-Vietnam woodwork is rated highly in the US thanks to product diversification, particularly regarding wooden furniture. Export of this product group to the US market is forecast to grow steadily at 15-17 percent per year in the coming years,” said Quyen.

Vietnam’s woodwork export to the US make up 39 percent of Vietnam’s total export value and more than 70 percent of that value is made up of wooden furniture as well as wooden products used in construction.

A forecast by Vinafores shows that Vietnam could be raking in $12-15 billion from woodwork exports by year 2020 with more than 35 percent coming in from the US.

“The signing of the TPP will make made-in-Vietnam woodwork less costly thanks to tax cuts. This will prompt a lot of US importers to shift towards placing orders with Vietnamese partners, instead of partners from China and other ASEAN countries,” said Vo Diep Van Tuan, deputy general director of Truong Thanh Furniture.

It is also forecast that the importation of wooden material from the US will increase because of TPP. “Locally sourced materials can now meet only 50-60 percent of the local demand, and so local firms must import wooden materials for production. The US is Vietnam’s leading wooden material supplier. Last year, we imported $380-400 million in such materials from the US. When the TPP comes into force, intra-bloc import duty on wooden materials will fall to zero percent, paving the way for a rise in US imports, which can cash in on tax cuts while ensuring product origin legitimacy,” said Quyen.

Vietnamese woodwork export firms have adhered to the Lacey Act resulting in smooth export activities with no wood products that had to be returned. The Vietnamese government have kept a close eye on imported wooden material sources to ensure that this continues.