(TIỂU LUẬN) final exam report subject international trade

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 Ho Chi Minh City, April 17th, 2022 Group: No Student ID Name Email khanhdoan.31201027082 @st.ueh.edu.vn 31201027082 Đoàn Kiều Gia Khánh 31201025705 Trần Minh Bảo Anh 31201025108 Nguyễn Đức Trí Dũng dungnguyen.31201025108 @st.ueh.edu.vn 31201024693 Nguyễn Phương Uyên uyennguyen.31201024693 @st.ueh.edu.vn anhtran.31201025705 @st.ueh.edu.vn Assignment of duties Part 2.1 Part 2.3c References Part 2.4 Part 2.3.b References Part 2.2 Part 2.3.a References Part 2.3.d Introduction Conclusion References Contribution Percentage 100% 100% 100% 100% TABLE OF CONTENTS Page Introduction .3 Main contents 2.1 Overview of VN's exports of wood and wood products to export markets 2.2 Characteristic analysis of two selected export markets .5 2.2.a The UK market .5 2.2.b The Netherlands market 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 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 Conclusion 17 References 18 Appendix 21 TABLE OF ACRONYMS EU UK US VN VNFOREST GDC EVFTA UKVFTA WTO MARD TRAV VNTLAS FLEGT VPA EUTR CITES FSC Europe Union The United Kingdom The United States Vietnam Vietnam Administration of Forestry General Department of Vietnam Customs EU-Vietnam Free Trade Agreement UK- Vietnam Free Trade Agreement World Trade Organization Ministry of Agriculture and Rural Development Trade Remedies Authority of Vietnam Vietnam Timber Legality Assurance System The Forest Law Enforcement, Governance, and Trade Agreements The Voluntary Partnership Agreement The European Union Timber Regulation Convention on International Trade in Endangered Species Forest Stewardship Council 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 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 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 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 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 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 economy in the world in terms of GDP, and the number 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 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 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 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 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$ 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 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 the Netherlands dropped sharply in August and September of 2021 due to the impacts of the Covid19 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 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 Table 1: Ordinal Number Content Export tariffs EVFTA (the Netherlands) UKVFTA (the UK) Products of Chapter 94 including wooden furniture of a kind used in offices, kitchens, bedrooms, and other wooden furniture: all items will be reduced to 0% by the EU as soon as the Agreement comes into force On the basis of inheriting the EVFTA, the UKVFTA has regulations on the form of commitments 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 years from the date of entry into force of the FTA Rules of Origin Products of Chapter 94: The Commodity Code Conversion (CTH) rule or percentage limit on non-originating materials (VL) content of non-originating materials is calculated based on ex-works prices and a universally applicable rate of 70% On the basis of inheriting the EVFTA, the UKVFTA has regulations on the form of commitments similar to the EVFTA For some raw wood products: Applying rules of specific processing stages Certification: Exporters must use the C/O form EUR1 Non-tariff barriers The EVFTA includes commitments The UKVFTA has no regarding sustainable forest management other obligatory and forest products: requirements - Commitments encouraging trade in regarding non-tariff timber from sustainably managed and barriers on wooden furniture products harvested forests in accordance with domestic legislation VN has signed a bilateral FLEGT agreement with the EU, coming into force on 01/06/2019 - 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 Due Diligence Netherlands (EUTR) United Kingdom (UKTR) 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  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 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 chemical substances Compliance with REACH regulation, which is a new regulation in the EU on chemicals and the safe use of chemicals No specified Importers have to use paper materials for lining furniture, instead of plastic as before The British government also encourages the use of recycled materials with international certifications for environmental protection Materials used for timber lining 10 2.3.c Trade remedy regulations that Vietnamese businesses need to understand when exporting goods to the market Table 3: Ordinal Number 1.1 1.2 Trade remedies EVFTA Content (the Netherlands) Anti-dumping and countervailing duties Commitment - Publicize written information to stakeholders to procedures to give average opinions on related contents and - Related parties should have the opportunity transparency to express their standpoints during the trade remedy investigation - English is the common language used between VN and the EU during the trade remedy investigation Commitment - EVFTA stipulates the application of the rule on tax rate of choosing a lower tax rate UKVFTA (the UK) On the basis of inheriting EVFTA, UKVFTA has regulations on the form of commitments similar to EVFTA - 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 on the conditions for applying the measure - Public interest: Measures are only applied when meeting all factors as prescribed by WTO (with dumping, with significant injury, with cause-and-effect relationship) and a fourth factor that does not affect the public interest Global safeguard measures On the basis of EVFTA stipulates that parties comply with inheriting WTO regulations on global safeguard 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 11 3.1 3.2 - To facilitate bilateral exchanges between the two sides and only officially apply safeguard measures 30 days after the failure of bilateral exchanges Bilateral safeguard measure Conditions - An increase in import products from other party due to the reduction of duties under this Agreement and is the cause of serious injury to the domestic industry Investigation procedures On the basis of inheriting EVFTA, UKVFTA has regulations on - The measure is applied only during the first the form of 10 years when the Agreement takes effect commitments similar to - Bilateral consultations with the other party EVFTA should be made before the initiation of an investigation - The investigation limitation is years - In special cases, a provisional safeguard measure may be applied during the investigation, but for no longer than 200 days 3.3 Safeguard form - Temporarily suspending tariff reduction as committed in the Agreement - Increase tax but not exceed the lower tax rate among the 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/TTBCT 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 12 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 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 woodbased 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 13 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 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 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 Some issues that VN’s businesses need to pay attention to increase export turnover for wood products to the UK market 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 This means that Vietnamese furniture exported to the UK market in the future needs to comply with the UK Government's regulations 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 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 The British government will require exporters using input wood materials to have FSC certification (a VN’s enterprises need to pay more attention to the importance of social responsibility, and 14 voluntary standard to support responsible forest management on a global scale) transparent information 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 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 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 15 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 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 16 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 17 References - 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Trade Agreement (Vietnam-EU FTA): an analysis of trade creation and trade diversion effects Journal of International Economics and Management, (72), 3-20 - Duong, N B (2016) Vietnam-EU Free Trade. .. 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... of Vietnam Customs EU-Vietnam Free Trade Agreement UK- Vietnam Free Trade Agreement World Trade Organization Ministry of Agriculture and Rural Development Trade Remedies Authority of Vietnam