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Strict control of fraudulent trading "vital" issue for wood industry

16:05 | 05/10/2020

VCN - Besides solutions such as clearly defining strategic products and markets; diversifying products from plantation timber, promoting the efficiency of the forestry development chain, the strict control of fraudulent trading is a "vital" issue for the wood industry.

New strategies required to set deeper roots for wood industry New strategies required to set deeper roots for wood industry
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Overview at the conference. Photo: Cao Cam

South Korea imposed tax, US sued

According to the latest information from the Vietnam Administration of Forestry (Ministry of Agriculture and Rural Development), in the first nine months of 2020, the export value of wood and forest products was estimated at US$8.97 billion, up 12% compared to the same period in 2019. The main export in eight months was US$7.01 billion, accounting for 89.4% of the export value of forest products of Vietnam.

Speaking at aconference of the wood industry to discuss solutions to achieve forest product export targets in 2020 onthe afternoon of September 25, in BinhDinh province, Mr. Bui ChinhNghia, Deputy Director of the General Department of Forestry said, in the last nine months, the whole industry has seen many changes, affecting the production, processing and export value of timber and forest products.

Besides the impact of the Covid-19 pandemic, the most notable issue is the impact caused by trade competition cases. Specifically, on March 1, the US Department of Commerce (DOC) officially received the petition of the United States Hard Plywood Union.

The content is the investigation and application of anti-evasion tax, anti-dumping duty and product subsidy of plywood items (HS code 4412) exported from Vietnam due to suspicion that this product originated from China.

On September 6, 2020, the DOC decided to initiate an investigation, sending a survey on the quantity and value of plywood exports to the United States to 55 Vietnamese enterprises and asked enterprises to return documents and reply to the DOC on September 24, 2020. After September 24, 2020, the DOC will select an enterprise for the mandatory investigation and conduct a preliminary investigation.

In addition, the notable case is that Korea imposed a temporary anti-dumping tax on Vietnamese plywood.

On May 26, 2020, the Korean Ministry of Economy and Finance decided to impose a temporary anti-dumping tax on plywood imported from Vietnam from 9.18% to 10.65%. The deadline for applying the tax rate is from May 29 to September 28, 2020.

Currently, the Korean side has finished the actual investigation at enterprises and will announce the official decision at the end of September 2020.

Fighting against fraud is a "vital" issue

Regarding exports of the wood industry, especially focusing on the analysis of trade fraud leading to risks of trade remedies, Mr. Do Xuan Lap, Chairman of the Vietnam Timber and Forest Products Association, said it cannot be denied that the US-China trade war has created a huge opportunity for the wood industry to expand exports, especially in strategic markets.

Export data from the General Department of Customs show that Vietnam's exports of wood products to the US increased from 43% in 2018 out of the total export turnover, increased by 50% in 2019 and 53% in the first eight months of 2020. However, opportunities also come with risks of commercial fraud.

In 2020, timber and forest product exports will confidently reachUS$12.5 billion. Photo: N.Thanh.

The US government is investigating Vietnamese plywood products exported to the US. Besides plywood, there are two items showing signs of risk, which are kitchen cabinets/bathroom cabinets made of plywood and sofas with frames made of plywood.

Specifically, in the first eight months of 2020, the export turnover of kitchen cabinets from Vietnam to the US increased by over 80%, the export turnover of sofa frames made from plywood to the US increased by over 40%.

Information from local associations also said that some Chinese enterprises are hiring legal entities of some Vietnamese enterprises to import finished products for export to the US.

"These are relatively clear signs of trade fraud. The established group of kitchen cabinets with the participation of Chinese manufacturers is an important clue and channel for exposing information the enterprises," Mr. Lap said.

In the current context, besides solutions such as clearly defining strategic products and strategic markets to support the breakthrough development of the wood industry; diversify products from plantation timber, promoting the efficiency of the forestry development chain, Mr. Lap said that strictly controllingtrade fraud is a "vital" issue for the wood industry.

In addition to the above-mentioned contents, Mr. Le Minh Thien, Chairman of BinhDinh Timber and Forest Products Association, proposed the Government, the Ministry of Agriculture and Rural Development and related agencies to allow forestry enterprises, processing and manufacturing wooden furniture and wood products enterprises approaching low interest ODA loans.

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By Thanh Nguyen/ Phuong Thao