Vietnam’s wood exports to the European Union (EU) is likely to reach 1 billion USD after the recently ratified EU-Vietnam Free Trade Agreement (EVFTA) takes effect, according to market watchers.

Processing wood for exports (Photo: VNA) 

This is thanks to the provision that after the move, 90 percent of Vietnamese wood products to the market will be subjected to the zero percent import tax rate, said Secretary General of the Ho Chi Minh City Handicraft and Wood Industry Association (HAWA) Nguyen Chanh Phuong.

In 2019, Vietnam exported nearly 700 million USD worth of wood products to the EU – an important supplier of wood material for the Southeast Asian country.

The EVFTA was ratified on February 12 by the European Parliament (EP) along with the EU-Vietnam Investment Protection Agreement (EVIPA).

The two documents were signed in Hanoi on June 30 last year, including intensive, extensive and comprehensive commitments covering economy, trade, investment and sustainable development issues.

The EVFTA, in particular, is expected to create a major push for Vietnam’s exports, helping diversify the country’s exports and markets. 

Under the agreement, Vietnam will cut 65 percent of import tax on EU commodities right after the deal takes effect, while the rest will be erased in a 10-year period. 

Meanwhile, the EU will cut more than 70 percent of tariff on Vietnam’s commodities right after the deal takes effect, while the rest will be abolished in the seven subsequent years.