lOMoARcPSD|16293274

bt cuối kỳ thương mại quốc tế 2021-2022

Ngoại Thương (Trường Đại học Kinh tế Thành phố Hồ Chí Minh)

Studocu is not sponsored or endorsed by any college or university

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UNIVERSITY OF UEH
BUSINESS SCHOOL
FACULTY OF INTERNATIONAL BUSINESS - MARKETING

FINAL EXAM REPORT

SUBJECT: INTERNATIONAL TRADE

Instructor: Ms. Hoàng Thu Hằng

Class Code: 22D1BUS50311001
Grade - Class: K46 - FTC01
Group participants: Group 2

Ho Chi Minh City, April 17th, 2022

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Group: 2

Assignment
Contribution
No Student ID Name Email of duties
Percentage
Part 2.1
khanhdoan.31201027082
1 31201027082 Đoàn Kiều Gia Khánh Part 2.3c 100%
@st.ueh.edu.vn
References
Part 2.4
anhtran.31201025705
2 31201025705 Trần Minh Bảo Anh Part 2.3.b 100%
@st.ueh.edu.vn
References
Part 2.2
dungnguyen.31201025108
3 31201025108 Nguyễn Đức Trí Dũng Part 2.3.a 100%
@st.ueh.edu.vn
References
Part 2.3.d
uyennguyen.31201024693 Introduction
4 31201024693 Nguyễn Phương Uyên 100%
@st.ueh.edu.vn Conclusion
References

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TABLE OF CONTENTS
Page
1. Introduction............................................................................................................................. 3
2. Main contents .......................................................................................................................... 4
2.1. Overview of VN's exports of wood and wood products to export markets ........................ 4
2.2. Characteristic analysis of two selected export markets ..................................................... 5
2.2.a. The UK market.......................................................................................................5
2.2.b. The Netherlands market ......................................................................................... 6
2.3. Comparison and analysis of legal provisions associated with international trade from the
selected markets ..................................................................................................................... 7
2.3.a. Important contents from FTA agreements between VN and the UK and the
Netherlands markets regarding wooden furniture ............................................................. 7
2.3.b. Timber Regulation and Standard of technical barriers to trade (TBT) in the UK and
the Netherlands ................................................................................................................ 9
2.3.c. Trade remedy regulations that Vietnamese businesses need to understand when
exporting goods to the market ........................................................................................ 11
2.3.d. Other trade barriers in the two markets arise in the current context affecting the
export efficiency of Vietnamese enterprises ................................................................... 13
2.4. Three most urgent notes to help businesses prepare well to increase export efficiency in
2023 in these two markets..................................................................................................... 15
3. Conclusion ............................................................................................................................ 17
4. References............................................................................................................................. 18
5. Appendix .............................................................................................................................. 21

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TABLE OF ACRONYMS

EU Europe Union
UK The United Kingdom
US The United States
VN Vietnam
VNFOREST Vietnam Administration of Forestry
GDC General Department of Vietnam Customs
EVFTA EU-Vietnam Free Trade Agreement
UKVFTA UK- Vietnam Free Trade Agreement
WTO World Trade Organization
MARD Ministry of Agriculture and Rural Development
TRAV Trade Remedies Authority of Vietnam
VNTLAS Vietnam Timber Legality Assurance System
FLEGT The Forest Law Enforcement, Governance, and Trade Agreements
VPA The Voluntary Partnership Agreement
EUTR The European Union Timber Regulation
CITES Convention on International Trade in Endangered Species
FSC Forest Stewardship Council

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1. Introduction

Through an oriented development strategy, VN's wood processing industry has seen remarkable
growth in the last ten years, with export turnover of wood products and furniture consistently
ranking among the top commodity groups. the country's main export commodity VN is now one
of the world's "brightest stars" in wood-based furniture production and exports, with furniture
exports accounting for approximately 6% of the global market share, with large markets such as
the United States, Japan, China, the European Union, Korea, and some new potential markets such
as Canada, Russia, India... Despite a difficult year as a result of the pandemic, VN's exports of
timber and non-timber forest products are expected to reach USD 15.6 billion in 2021, up by 18
percent compared to 2020. In which, the exports of wood and products reached USD14.5 billion,
up by 17.2 percent compared to 2020. VN's wood processing industry is steadily expanding to
become a "new star" of the Asian furniture industry, confirming its position and prestige in the
international market through the signing of FTA agreements.

With the signing of the Voluntary Partnership Agreement (VPA); the Forest Law Enforcement,
Governance, and Trade Agreements (FLEGT) with the EU (European Union) on the
implementation of the Law on Forestry, Forest Governance, and Trade in Forest Products,
effective June 1, 2019, and other FTA agreements such as the European Union Vietnam Free Trade
Agreement (EVFTA) and the UK-Vietnam Free Trade Agreement (UK-Vietnam FTA)
(UKVFTA), many favorable conditions have been created for the development of Vietnam's
forestry industry, which aids in gaining access to difficult, but highly profitable markets and
increasing competition with similar products from other countries.

According to the Vietnam Timber and Forest Products Association, the wood processing and
exporting industry has seen a high import volume in the market since the UK-Vietnam free trade
agreement (UKVFTA) took effect in May 2021, reaching an export turnover of USD 5.24 billion,
a more than 15% increase over 2020. The export of Vietnamese wooden furniture to the UK
increased dramatically in 2021, with products for living rooms and dining rooms. They are
followed by wooden bedroom furniture and wooden frame chairs. The UKVFTA is the driving
force for Vietnamese wood processing and exporting businesses to provide more options to
consumers. For a long time, the Netherlands has been regarded as the entry point to the EU market,
and the EVFTA is opening up a slew of new opportunities for Vietnamese and the Netherlands
businesses. VN is the Netherlands' fourth-largest non-blocking wooden furniture supplier, after
China, Indonesia, and India. VN's import value reached 37.3 million euros (equivalent to 44.4
million USD), a 15% increase over the same period in 2020.

As a result, this study will gather information from reliable secondary data sources to analyze the
status of VN's export wood processing industry's wooden furniture. The study aims to examine the
requirements associated with international trade in the export market that Vietnamese businesses
must understand to increase export efficiency. The study's findings will be important
recommendations for the state in the policymaking process, as well as for businesses in preparing
to compete in the export furniture industry when the EVFTA comes into force.

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2. Main contents

2.1. Introduction and overview of VN's exports of wood and wood products to export
markets.
In the context that the country's economy has been heavily affected by the COVID-19 pandemic
along with the innovation of the economy, the wood processing industry has achieved great
achievements in both quantity and quality of processing enterprises, in terms of export turnover
and product consumption markets. The proportion of export of wood and wood products still has
marked development, contributing significantly to the increase of VN's export capacity. Instead of
just focusing on re-exporting to a third country like before, VN's processed wood products are now
stably present in more than 140 countries and territories around the world with many businesses
direct export to consumer markets, in which the main markets are the US, Japan, China, the EU,
the UK, and Korea.

The export turnover of wood and wood products is increasing steadily. According to the
announcement of the VNFOREST, in the 11 months of 2021, the export turnover of the wood and
wood products group reached 14.5 billion USD, up 17.2% compared to 2020 including wooden
furniture products reached 10.87 billion USD, up 14 %; all kinds of wood reached USD 3.6 billion,
up 28%. In December 2021, according to data from the GDC, VN's exports of wood and wood
products reached 1.43 billion USD, up 12.4% over the previous month, and up 6.84%. compared
to December 2020. In which, the export turnover of wood products reached US$1.074 billion, up
17.3% over the previous month and 2.67% compared to December 2020.

(Source: Gỗ Việt analyzed from data of the GDC)

Figure 1: Export turnover of VN's wood and wood products by month from 2018 to 2021

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In the European market - one of the largest markets for VN's wood products consumption,
especially the Netherlands and the UK, both are the 2nd and 3rd largest trading partners of VN,
respectively in recent years. Although experiencing many difficulties due to the response to the
COVID-19 epidemic, the export turnover of VN's wood processing and export industry in 2021 in
the two this potential markets is recovering and still exceeds the expectations of the whole branch.

As for the Netherlands, according to data from the GDC, in the first 9 months of 2021, VN's export
turnover of wood and wood products reached 70 million USD, up 36.9 % compared to the same
period last year. Wooden furniture is the main product that VN exports in the first 8 months of
2021, reaching 57.2 million USD, up 46.3% over the same period in 2020; accounting for 85.7%
of the total export turnover of wood and wood products to this market. Moreover, VN is the 4th
largest wooden furniture supplier to the Netherlands. VN has a distinct advantage when the
EVFTA is signed, according to which the tax rates of Vietnamese products are more competitive
than big markets such as China and India.

As for the UK, according to data from the GDC, the export turnover of wood and wood products
in 2021 reached 254.44 million USD, up 14.5% compared to 2020. Following the success, in
January 2022, the export turnover continued to increase strongly, reaching 30.7 million USD, up
11.6% compared to December 2021, up 47.7% compared to January 2021. Moreover, the
UKVFTA plays an important role, the wood industry also benefits when many wood products and
wood products have a tax rate of 0% within 5 years, contributing to increasing competition with
many generic products from other countries.

However, from 2021 until now, the proportion of imports from VN to the Netherlands accounted
for only 1.21% and 2.8% of the total value of the Netherlands' wooden furniture imports. At the
same time, VN's goods only account for 1% of the total number of goods imported from other
countries into the UK. This indicates that these two countries still have a lot of fiscal space for
wood products and wood products, this is a potential opportunity for our group to carry out a
project to research and show what Vietnamese business need to understand to increase export
efficiency to these two markets in the future.

2.2. Characteristics of the selected markets.

2.2.a. The UK market

The UK, or the United Kingdom of Great Britain and Northern Ireland, is made up of four
countries: England, Scotland, Wales, and Northern Ireland. Regarding market size, as a whole, in
2020 the UK was the number 5 economy in the world in terms of GDP, and the number 4 in total
imports according to OEC.world. It is considered a valuable destination for Vietnamese exporters
including those in the timber and wooden products sector. The timber and wood products import
market to the UK netted about US$ 201.2 million in the first 9 months of 2021, increased by 25%
compared to the same period in the previous year. On the subject of wooden furniture, the UK is
the largest importer in the world with 91,637 shipments and 1,376 buyers from 70 countries
(figures are updated till March 2022), according to Volza.com.

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Regarding its growth potential, in spite of the disadvantages created by the Covid-19 pandemic,
wood and wood products exported to the UK still see a stable growth rate. The UK’s demand for
importing and consuming home furniture is forecasted to grow at a growth rate averaging over
3.2% in the period of 2021 – 2026 according to mordorintelligence.com. This can be explained by
several factors such as the rise in the development and construction of new offices, hospitality
infrastructure, or the need for modern interiors of households and workplaces.

The UK imports most of its wood and wood products from Poland and China. In regards to wooden
furniture, India, VN, and Indonesia are three of the key exporters of the UK. Some of the key
imported categories consist of construction furniture, chairs, kitchen, and bedroom decorations.
Vietnam is the third-largest wood furniture supplier to the UK, after China and the EU, accounting
for 7.9% of the total British wooden furniture imports value.

To do business in the UK, exporters should consider looking into its business culture and practices.
The UK’s business respects courteousness, discipline as well as humor. One of the first things
exporters to the UK should know is the way to communicate to their business partners, this
includes greetings, invitations, punctuality, dress codes, and other aspects. Another essential is the
understanding of the UK’s language and religion: the main language spoken in the UK is English
but there are also Welsh spoken in Wales and other regional dialects; the UK is a multi-faith society
with the official being Christianity, religion has an indirect effect on how a business in the UK
functions.

In the wooden furniture market, reports show that one of the most imported products to the UK is
the wooden kitchen furniture section. British often buy their furniture from famous retailers such
as IKEA – the largest furniture retailers. IKEA also has a considerable impact on the Vietnamese
furniture market with producing and exporting professionally designed products. On another note,
some UK’s online guides on choosing wooden furniture recommend choosing the following types
of wood: beech, pine, oak, teak, ash, and maple.

2.2.b. The Netherlands market

The Netherlands, or Holland, is a Western European country with the nominal capital being
Amsterdam. The Netherlands occupies a highly strategic location for international commerce.
Along with its developed logistics and distribution network, the country has become a strong link
to other European countries and more. Regarding market size, as a whole, in 2020 the Netherlands
was the number 17 economy in the world in terms of GDP, and the number 8 in total imports
according to OEC.world.

The Netherlands market for furniture is the 6th biggest in Europe and one of the most active
markets in the world. The Netherlands imports approximately US$ 2 billion worth of furniture
each year. Wooden furniture is the prevalent product in the timber and wood product sector
imported to the Netherlands market with the import value of US$ 57.2 million in the first 8 months
of 2021, an increase of 46.3% compared to the same period the previous year.

On the subject of the growth potential of the Netherlands wooden furniture market, the volume of
imports increased dependably in the 2015 – 2019 period. Timber and wood products imported to

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the Netherlands dropped sharply in August and September of 2021 due to the impacts of the Covid-
19 pandemic, however, it has been recovering steadily since.

The Netherlands import structure for the wooden furniture market is diverse. Import from the same
region is predominant but decreasing while import from other nations is increasing. In the first 8
months of 2021, wood plank and flooring, wooden handicraft, and mirror frame are the imports
that increased substantially while wooden doors plummeted. VN is the 4th largest outside of
Europe wooden furniture exporter to the Netherlands, after China, Indonesia, and India. However,
Vietnamese imports only accounted for 2.8% of the total value of the market.

Also from Europe, the Netherlands business culture and practices resemble those of the UK in
some way. Businesses in the Netherlands value honesty, reliability, and courtesy. They can be
open and welcoming and also forceful and tough negotiators. Apart from the general cultural
awareness mentioned in the previous part, exporters should pay close attention to punctuality and
greetings in the Netherlands. English is widely used in the Netherlands including business English.
However, not all Dutch people understand English, hence, it is essential to provide adequate labels
and manuals in Dutch. The Netherlands has a religiously tolerant society as various religions are
accepted in the country such as Roman Catholic, Protestant, Muslim, and other religions.

Like the UK, Dutch people tend to buy their furniture from retailers such as IKEA or Leen Bakker
– a Netherlands furniture company. The reason is that they offer cheap prices. Additionally, the
most noticeable imported wooden furniture into the Netherlands include Livingroom and Kitchen
furniture and wooden-framed chair.
2.3. Comparison and analysis of legal provisions associated with international trade
from the selected markets.

2.3.a. Important contents from FTA agreements between VN and the UK and the
Netherlands markets regarding wooden furniture.
As a member of the EU, the Netherlands provides Vietnamese exporters with competitive
advantages as regulated in the EVFTA - a new generation FTA between VN and 28 European
Union member states, entering into force on 01/08/2020.
Negotiated on the basis of inheriting the commitments in the EVFTA along with necessary
adjustments to conform with the bilateral trade framework of VN and the UK, the UKFTA
officially comes into force on 01/05/2021.
The following table covers the key commitments in the two FTAs regarding the subject of wooden
furniture imported to the Netherlands and the UK.

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Table 1:
Ordinal EVFTA UKVFTA
Content
Number (the Netherlands) (the UK)
1 Export Products of Chapter 94 including wooden On the basis of
tariffs furniture of a kind used in offices, inheriting the EVFTA,
kitchens, bedrooms, and other wooden the UKVFTA has
furniture: all items will be reduced to 0% regulations on the
by the EU as soon as the Agreement form of commitments
comes into force. similar to the EVFTA.
Products of Chapter 44: including
wooden parts and other wooden
products: about 83% of tariff lines,
currently with base tax rate of 0-6%, will
be eliminated by the EU to 0% as soon as
the Agreement comes into effect; the
remaining 17% of tariff lines, group with
a base tax rate of 7-10% that the EU is
applying, will be gradually eliminated to
0% within 6 years from the date of entry
into force of the FTA.

2 Rules of Products of Chapter 94: The Commodity On the basis of

Origin Code Conversion (CTH) rule or inheriting the EVFTA,
percentage limit on non-originating the UKVFTA has
materials (VL) content of non-originating regulations on the
materials is calculated based on ex-works form of commitments
prices and a universally applicable rate of similar to the EVFTA.
70%.
For some raw wood products: Applying
rules of specific processing stages.
Certification: Exporters must use the C/O
form EUR1.

3 Non-tariff The EVFTA includes commitments The UKVFTA has no

barriers regarding sustainable forest management other obligatory
and forest products: requirements
- Commitments encouraging trade in regarding non-tariff
barriers on wooden
timber from sustainably managed and
harvested forests in accordance with furniture products.
domestic legislation. VN has signed a
bilateral FLEGT agreement with the EU,
coming into force on 01/06/2019.

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- Commitments on information provision

and cooperation between the two Parties
on measures to encourage the
consumption of timber and wood
products from sustainably managed
forests, against illegal logging and trade.

2.3.b. Timber Regulation and Standard of technical barriers to trade (TBT) in the
UK and the Netherlands.
The Netherlands is a member of the European Union, so the technical regulations and standards
will be similar to the EU Timber Regulation. As of January 2020, the UK officially leaves the EU,
the European Timber Regulation (EUTR) and Forest Law Enforcement Governance and Trade
(FLEGT) no longer apply in Great Britain (England, Scotland, and Wales). Although currently the
UK Government still applies the EU Timber Regulation (EUTR), it is gradually tightening
environmental regulations.

Table 2:
Criteria Netherlands (EUTR) United Kingdom (UKTR)

Due Diligence The EUTR entered into force in 2013. It prohibits the placing of illegal
logging on the EU market and requires EU operators to perform due diligence
checks to ensure the timber products they place on the EU market are legal.
The core of the 'due diligence' notion is that operators undertake a risk
management exercise so as to minimize the risk of placing illegally harvested
timber, or timber products containing illegally harvested timber, on the EU
market.
The three key elements of the "due diligence system" are:
 Information: The operator must have access to information describing
the timber and timber products, country of harvest, species, quantity,
details of the supplier, and information on compliance with national
legislation.
 Risk assessment: The operator should assess the risk of illegal timber
in his supply chain, based on the information identified above and
taking into account criteria set out in the regulation.
 Risk mitigation: When the assessment shows that there is a risk of
illegal timber in the supply chain, that risk can be mitigated by
requiring additional information and verification from the supplier.
Timber will be recognized as legally harvested if one of the following applies:
 It has a Convention on International Trade in Endangered Species
(CITES) import permit

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 It’s accompanied by a valid Forest Law Enforcement, Governance

and Trade (FLEGT) license
 It has a Forest Stewardship Council (FSC) certificate
You don’t need to carry out due diligence on this timber.
For countries with FLEGT - VPA with the EU and UK, you do not have to
conduct due diligence for timber or wood products that are imported directly
if it’s covered by a valid FLEGT license
All species in composites must be considered separately, but where they are
a mix of virgin and recycled timbers, only the former need to be assessed.
For timber placed on the GB market to be considered legal, it must have been
harvested without contravening any of the applicable legislation in the
country of origin. The implication for anyone intending to place timber on
the GB market is that they must identify the country of harvest, understand
the applicable legislation and ensure that the timber has been harvested in
accordance with those laws.
‘Applicable legislation’ refers to the legislation that is in force in the country
in which the timber was harvested. Timber harvesting laws vary from country
to country, however some of the common subjects which harvesting laws
cover include:
• trade and customs laws that relate to timber harvesting;
• rights to harvest and legally harvestable species;
• payments for harvest rights and duties related to the harvesting of timber;
• biodiversity conservation and forest management;
• legal rights of third parties with regards to use and tenure that are affected
by timber harvesting;
• transportation of timber.

Regulations on Compliance with REACH regulation, which is a new regulation in the EU on

chemical chemicals and the safe use of chemicals
substances

No specified Importers have to use paper materials

for lining furniture, instead of plastic
Materials used as before. The British government
for timber also encourages the use of recycled
lining materials with international
certifications for environmental
protection.

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2.3.c. Trade remedy regulations that Vietnamese businesses need to understand

when exporting goods to the market.
Table 3:
Trade remedies
Ordinal EVFTA UKVFTA
Content
Number (the Netherlands) (the UK)
1 Anti-dumping and countervailing duties
1.1 Commitment - Publicize written information to stakeholders On the basis of
to procedures to give average opinions on related contents. inheriting
and - Related parties should have the opportunity EVFTA,
transparency to express their standpoints during the trade UKVFTA has
remedy investigation. regulations on
- English is the common language used the form of
between VN and the EU during the trade commitments
remedy investigation. similar to
1.2 Commitment - EVFTA stipulates the application of the rule EVFTA.
on tax rate of choosing a lower tax rate.
- VN or the EU applies anti-dumping or
countervailing measures, the tax rate to be
applied must be based on the margin of
dumping or the margin of subsidy, and only at
a level sufficient to eliminate the injury.
- VN and the EU are both applying this rule in
their domestic law to all partners voluntarily,
but it is mandatory to use it with EU partners
and vice versa.
1.3 Commitment - Public interest: Measures are only applied
on the when meeting all 3 factors as prescribed by
conditions for WTO (with dumping, with significant injury,
applying the with cause-and-effect relationship) and a
measure fourth factor that does not affect the public
interest.
2 Global On the basis of
EVFTA stipulates that parties comply with
safeguard inheriting
WTO regulations on global safeguard
measures EVFTA,
measures, and adds the following additional
UKVFTA has
requirements:
regulations on
- The party initiating the investigation the form of
/preparing to take a safeguard measure shall commitments
notify in writing all the background similar to
information and the basis for the decision in EVFTA.
the safeguard case.

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- To facilitate bilateral exchanges between

the two sides and only officially apply
safeguard measures 30 days after the failure
of bilateral exchanges.
3 Bilateral safeguard measure
3.1 Conditions - An increase in import products from other On the basis of
party due to the reduction of duties under this inheriting
Agreement and is the cause of serious injury to EVFTA,
UKVFTA has
the domestic industry.
regulations on
- The measure is applied only during the first the form of
10 years when the Agreement takes effect. commitments
3.2 Investigation - Bilateral consultations with the other party similar to
procedures EVFTA.
should be made before the initiation of an
investigation.
- The investigation limitation is 1 years.
- In special cases, a provisional safeguard
measure may be applied during the
investigation, but for no longer than 200 days.
3.3 Safeguard - Temporarily suspending tariff reduction as
form committed in the Agreement.
- Increase tax but not exceed the lower tax rate
among the 2 tax rates, which are the MFN at
the time of applying the safeguard measure and
the original negotiated base rate.

Along with the EVFTA and UKVFTA taking effect, Europe is one of the regions with an increased
tendency to use trade remedy measures and attach importance to compliance with rules of origin,
when Europe has a trade deficit deeper trade, there will tend to increase trade remedies. Wooden
furniture is one of the main exports of Vietnam and is having a large export turnover when
exporting to the Netherlands and the UK, but this strong industry is protected by the Europe
market. Thus, promoting the export of this product should always be careful in the implementation
of the rules of origin.

In terms of the legal basis, the Ministry of Industry and Trade has issued Circular No. 14/2021/TT-
BCT guiding the implementation of the EVFTA on trade remedies. At the same time, the
introduction of the Law on Foreign Trade Management and guiding documents on trade remedies
(Decree 10/2018/ND-CP of the Government) stipulated several articles of the Law on Foreign
Trade Management on trade remedies. Thereby, there is a legal basis to guide Vietnamese
businesses to apply bilateral safeguard measures, anti-dumping measures, and anti-subsidy
measures when implementing EVFTA and UKVFTA. Along with that, Vietnamese businesses
have committed to strictly comply with the requirements of import markets such as the EU Timber

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Regulation (EUTR 995/2010) for the European market to create transparency, reputation for VN’s
wooden furniture when exporting to the Netherlands and the UK.

Besides, the Government has issued Decree No. 102/2020/ND-CP provides for Vietnam Timber
Legality Assurance System (VNTLAS), establishing mechanisms to control imported and
exported wood. The Decree stipulates that imported wood is risk-managed according to criteria
that determine whether the country is in a positive or negative geographical area, the type of wood
is at risk or not in the risk category. Simultaneously implementing the Decree, the Ministry of
Agriculture and Rural Development (MARD) issued Decision No. 8432/QD-BNN-TCLN
announcing the List of active geographical regions and the list of wood species imported into VN.
These are important legal guidelines to guide avoiding risks for wood enterprises in import and
export activities.

Thus, Vietnamese businesses must master the legal regulations and practices of trade remedy
investigation of these two export markets. Businesses need to regularly monitor and research the
recommendations, and early warnings of trade remedy measures from the Trade Remedies
Authority of Vietnam (TRAV) to be able to proactively make specific plans. At the same time,
businesses must always update information promptly to avoid anti-dumping lawsuits and the use
of available data by the investigating authority may be detrimental when concluding the case.
2.3.d. Other trade barriers in the two markets arise in the current context affecting
the export efficiency of Vietnamese enterprises.
The ongoing Russia - Ukraine conflict, causing EU countries such as the UK and the Netherlands
to impose tough economic sanctions on Russia, blocking Russia's international payment activities
will certainly create many difficulties for export activities of wood materials from Russia to
furniture enterprises in VN. Moreover, due to Britain's departure from the EU, some basic
applications of the EU Timber Regulation (EUTR) will be changed by the British government, and
Vietnamese enterprises must be ready to adapt to new challenges.
Table 4:

Explanation Trade barriers Affect to VN’s enterprises

Although the export market of
VN’s wooden products in Russia
is small, and will only reach
about 3 million dollars in 2021,
which is 0.05% of the total
wooden and furniture export
turnover from VN to the world.
However, VN is a large export
country for wooden furniture, but
it is highly dependent on
imported raw materials, so the
trade of the Vietnamese-Russian
wood industry is focused on
importing wood materials.
On March 1st, shipping lines
MSC, Maersk, CMA, and
CGM - the three largest
shipping lines in the world -
announced to suspend
transporting goods to and
from Russia in response to
Western sanctions after
when Moscow conducted a
special military operation in
Ukraine.
This incident will make
transportation of wood-
based materials from Russia
to VN is becoming more
difficult; which also affects
the export of wood products
by Vietnamese companies to
the UK and Netherlands
market.

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IKEA of the US is one of the
largest suppliers of wooden
products in the world and is also
a supplier of a huge amount of
wood materials for Vietnamese
furniture manufacturers.
Some issues that VN’s
businesses need to pay attention
to increase export turnover for
wood products to the UK market
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lOMoARcPSD|16293274
In addition, the wave of
companies and organizations
boycotting Russia is
becoming stronger and
stronger, as of March 7th,
2022, 250 organizations and
companies have announced
their withdrawal from
activities in Russia in protest
war - including IKEA of the
US.
Due to Britain's departure
from the EU, technical
barriers to goods imported
from the UK are very tight.
Procedures for exporting
wooden furniture to the UK
market are getting more and
more difficult.
March 25th, 2020 is the last
day for importers to declare
the materials used for
furniture lining according to
the regulation imposed by
the British government.
Moreover, importers must
use paper materials for
furniture lining, instead of
plastic as before. The UK
government also encourages
the use of recycled materials
with international
certification for
environmental protection
and they are accelerating the
implementation of the DNA
test program for wood
products to prove the legal
origin of the wood.
The British government will
require exporters using
input wood materials to
have FSC certification (a
14
This withdrawal will cause a
blockage in the supply chain
of wooden products for
Vietnamese enterprises and
will lead to fierce
competition for the source of
imported raw wood
materials with foreign
competitors from the UK
and the Netherlands.
This means that Vietnamese
furniture exported to the UK
market in the future needs to
comply with the UK
Government's regulations.
Vietnam Timber and Forest
Product Association should
be ready to warn businesses
to strictly comply with the
regulations and management
standards and processes set
by British government.
Moreover, Vietnam’s wood
industry enterprises need to
invest in improving the value
and quality of products and
goods in order to strengthen
the competitiveness in the
market.
VN’s enterprises need to
pay more attention to the
importance of social
responsibility, and
 lOMoARcPSD|16293274

voluntary standard to transparent information

support responsible forest
management on a global
scale).
about production and apply
responsible forest
management to better
prepare for the new
challenge.

We can summarize that under the impact of the Russia - Ukrainian war, Vietnamese wood
processing companies will face much competition from other countries for the source of imported
wood raw material. The price of imported wood materials has increased, reducing the competitive
advantage of our country's enterprises in the international arena. Along with that, pressure from
environmental and human rights organizations on businesses that continue to use Russian wood
and new regulations from the UK has increased, both for direct importers and businesses importing
Russian wood through China as wooden furniture products will be boycotted. In addition, this war
will affect global economic growth and increase inflation and this will put pressure on VN in the
short term. Especially when we are implementing a series of economic recovery and development
programs after the COVID-19 epidemic. Currently, VN's trade relations with Great Britain and the
Netherlands are very stable; but in the long term, they will be affected by the two mentioned
reasons, making it difficult to promote trade and investment relations and take advantage of the
provisions of the EVFTA agreement.
2.4. Three most urgent notes to help businesses prepare well to increase export efficiency
in 2023 in these two markets.
The export of timber and timber products from Vietnam to the Netherlands and the United
Kingdom enjoys numerous benefits and tax breaks as a result of the government-signed EVFTA
and UKVFTA. The benefits listed above will serve as the foundation for Vietnamese businesses
to improve exports and the value of trade exchange for essential commodities such as timber and
timber products. The EU market has a lot of promise for the timber products, but the standards are
quite stringent. We have the following recommendations to increase the efficiency of exporting
timber and timber products in 2023:

To begin, Vietnamese firms must pay more attention to the management process when exploiting
and producing timber products, as well as control the origin and causes influencing workers' life.
Gellert Horvath, Vice President of the European Chamber of Commerce (Eurocham) said that
"European customers are also concerned with the conditions in which the product is produced,
such as the environment, labors’ life. If VN's wooden furniture items fully match these
characteristics, the market possibility is enormous." The EU Timber Regulation is used in both the
UK and Dutch markets. The EUTR went into effect in 2013. It outlaws the sale of illegally
harvested timber on the EU market and requires EU operators to do due diligence measures to
guarantee that the timber products they sell on the EU market are legal. This rule severely enforces
the use of certificates and permits to prove the origin of wood, such as FLEGT, CITES, and FSC.
To do this, the state must enact special policies that allow firms to get afforestation property and
develop raw materials in a timely, sustainable, and legal manner. When exporting timber products
to the UK and Netherlands market, businesses must also pay attention to the management process,
regulate the origin, and meet the due diligence check, as well as secure the relevant certificates
and permits.

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Second, in order to increase export efficiency, exporters must grasp the growth potential, business
practices, and demand characteristics of timber and timber products in the Dutch and UK import
markets. The UK's import market for timber and timber products reached approximately 201.2
million USD in the first nine months of 2021, making it the world's largest importer. In terms of
growth potential, the UK's import and consumption demand for house furniture is expected to
expand at a rate of more than 3.2 percent per year between 2021 and 2026. In the United Kingdom,
consumers favor woods such as beech, pine, oak, teak, ash, and maple. UK business values civility,
discipline, and a sense of humor. One of the first things that exporters to the UK should learn is
how to communicate with their business partners, which includes greetings, invitations,
punctuality, dress rules, and other aspects.

In the Netherlands market, wooden furniture is a popular item in the wood industry and wood
products are imported into the Netherlands market with an import value of 57.2 million USD in
the first 8 months of 2021. During the initial eight months Imported wooden planks and flooring,
wooden handicrafts, and mirror frames have climbed substantially in 2021, whereas imported
wooden doors have declined sharply. After China, Indonesia, and India, Vietnam is the fourth
largest wood furniture exporter to the Netherlands outside of Europe. However, imports in
Vietnam account for only 2.8 percent of overall market value. Honesty, trustworthiness, and
civility are highly valued in the Netherlands business community. They can be open and friendly
while still being forceful and tough negotiators. In addition to general cultural knowledge,
exporters should pay attention to punctuality and pleasantries in the Netherlands.

Finally, Vietnamese enterprises must develop measures to deal with the negative consequences of
the Russia - Ukraine conflict, as well as changes in UK and EU timber regulations in the future.
VN is a big exporter of wooden furniture, but it is heavily reliant on imported raw materials, hence
the Vietnamese - Russian wood industry trade is mostly centered on importing wood resources.
The sanctions imposed on Russia by NATO members have resulted in a scarcity of raw materials.
The increase in gasoline costs as a result of Russia's embargo policy resulted in a 30-40% increase
in freight rates. Furthermore, it is predicted that the UK will demand FSC certification for exporters
using wood inputs in the near future (a voluntary standard to assist responsible forest management
on a worldwide basis). The UK government is also hastening the deployment of a DNA testing
program for wood products in order to prove the lawful origin of the wood. This will be handled
by the UK consumer rights group. This is not a new issue, and it has been forewarned for several
years. Exporters of Vietnamese wood and wooden furniture must have plans and solutions in place
to deal with the aforementioned issues.

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3. Conclusion

This study enriched the literature about export performance in the wooden furniture industry in the
context of a developing country. Firstly, our research adds to the existing studies about the impact
and policy implications of the Vietnam - EU Free Trade agreement (Duong et al (2016); Nguyen,
B. D.et al (2015)). Secondly, this paper adds to the growing body of scholarly work on exportation
by investigating it in the post-COVID-19 context.

These findings offer several practical implications for Vietnam’s businesses. First and foremost,
to increase the exportation of wooden products, Vietnamese firms must pay more attention to the
management process, as well as control the origin, social responsibility, and causes influencing
workers' lives. It is crucial to make sure the exported wooden products are designed in a legally,
consumer-friendly mode with much transparent information about the origin and sustainable forest
management; thereby successfully stimulating consumers to buy the products. Moreover, in terms
of exportation, Vietnam’s enterprises are suggested to invest in building strong and fast servers for
websites or apps in order to prevent customers from experiencing interruptions when making
purchases through e-commerce platforms.

Secondly, our study also indicates that among these antecedents, the Russia - Ukraine conflict is
having the most negative impact on the export market of Vietnam to the UK and the Netherlands.
Needless to say, this suggests that businesses in Vietnam need to plan early and come up with
suitable solutions to deal with the upcoming issues by finding alternative producers for imported
wood materials with lower cost as well as investing in the infrastructure to reduce the blockage in
the supply chain of wooden products. To sum up, these above-mentioned implications provide
useful guidance for VN’s business owners in terms of planning, executing, and redesigning
business strategy.

While this study provided many intriguing data and insights into our report about the exportation
of VN’s wooden furniture to the two markets the UK and the Netherlands; It also has several
limitations that should be considered. Firstly, we gathered information mainly from reading
newspapers and articles, without interviewing actual VN business owners. It is clear that our
research only reflects the perceptions of one small, specific group of people, therefore generalizing
our findings should be done with caution. Secondly, this research is conducted in VN, so the
findings may not apply to other customers with various cultural or demographic backgrounds. To
sum up, there are some limitations in our research that can be addressed in future research.

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5. Appendix

Figure 1.......................................................................................................................................4
Table 1 ........................................................................................................................................8
Table 2 ........................................................................................................................................9
Table 3 ...................................................................................................................................... 11
Table 4 ...................................................................................................................................... 14

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