Vietnam timber industry concerned over Chinese investments

Many local wood manufacturers voiced their concerns over Chinese firms now exploiting on Vietnamese companies to export timber products at a a seminar hosted by the Vietnamese Chamber of Commerce and Industry (VCCI). Taking place at Ho Chi Minh City, the focus of the seminar was to address the risks of timber export in the contact of Vietnam joining the Trans-Pacific Partnership and the EU-Vietnam Free Trade Agreement (EVFTA).

The TPP is a regional free trade agreemtn aimed at eliminating tariffs and lowering non-tariff barriers signed on February 4 this year by 12 countries across the Asia-Pacific region, including Vietnam. Together, the region contribtues almost half of global output and over 40% of world trade, according to the Office of the United States Trade Representative.

ECFTA is a free trade agreement between the European Union and Vietnam.

The fear of exploitation came from the recent tendency of chinese wood companies investing in Vietnam to avoid anti-dumping taxation on Chinese exports by the U.S, explained Huynh Van Hanh, vice president of the Ho Chi Minh City Handcraft and Wood Industry Association.

Chinese products, Hanh said, face a very high anti-dumping duty in the U.S., and Chinese companies are looking towards Vietnam to avoid the tax by exporting their products under Vietnamese labels.

According to Hanh, instead of manufacturing timber products in Vietnam, these companies only import goods from China, make some minor adjustments, then ‘re-export’ them to foreign markets within the TPP to take advantage of the favorable tax conditions that Vietnamese products enjoy as part of the agreement.

This create a portential of vulnerability to domestic manufactureres to anti-dumping lawsuits filed by American companies with the surge in Chinese investment in Vietnam’s timber industry.

According to commercial experts at the seminar, wood export is the industry with the biggest potential for growth in Vietnam’s agricultural sector over the coming years.

However, pundits have suggested that the industry be the subject of more government support and monitoring to avoid being taken advantage of by foreign companies.

Source: Tuoi Tre News