Trade risks rise for Vietnamese plywood exporters
Despite the continued spread of the world's new crown pneumonia epidemic, Vietnam's plywood exports have shown a good momentum of development, while also facing increasing accusations of dumping and evasion of trade remedies from the two largest markets of South Korea and the United States.
The Vietnam Timber and Forest Products Association held a conference on "Promoting Vietnam's Plywood and MDF Trade Development - Opportunities and Challenges" in Ho Chi Minh City on July 6.
Du Chunli, president of the Vietnam Timber and Forest Products Association, said that in recent years, the trend of wooden furniture design has led to the vigorous development of Vietnam's plywood industry, and the export value has continued to grow exponentially. However, the rapid growth of exports in a short period of time is also the reason why plywood faces more and more trade risks.
On June 9, the U.S. Department of Commerce (DOC) announced an official investigation into Vietnamese plywood after the Fair Trade Alliance for Hardwood Plywood filed charges against some Vietnamese plywood exporters for violating U.S. anti-tax avoidance regulations.
Specifically, the alliance accused some Vietnamese companies of importing Chinese plywood, and after processing and assembling them, they still applied for certificates of origin from relevant Vietnamese authorities and exported these products with Vietnamese labels without meeting the conditions of Vietnamese origin and labels.
The U.S. government may impose a temporary tax rate on Vietnamese plywood exported to the U.S. during the 300-day investigation period.
In addition to the United States, at the end of 2019, the Korea Trade Commission (KTC) conducted anti-dumping investigations against six Vietnamese plywood exporters. On April 24, 2020, the commission released its preliminary findings, imposing anti-dumping duties of 9.18% to 10.56% on plywood from Vietnam. The temporary tax rate will be applicable from May 29 to September 28, 2020.
Wu Shihuai, vice chairman and secretary general of the Vietnam Timber and Forest Products Association, said that in the context of the accelerating globalization process, there are more and more cases of anti-dumping investigations on plywood from Vietnam. If the country of origin of the product cannot be proved, Vietnamese plywood may face the risk of being levied by the United States with anti-dumping duties of more than 200%.
Le Xuan Jun, chairman of Vietnam Nano Furniture and Construction Company, believes that the timber association must review the export activities of member companies to find anomalies between production capacity and export volume. If fraudulent behavior is found, it must be reported to the relevant departments for strict handling.
In the context of fierce competition, even individual enterprises engaging in illegal business will make the entire wood processing industry with huge potential in Vietnam extremely expensive.