Recent developments have raised concerns regarding the adherence to timber trade agreements between the United States and Vietnam. Nearly two years after the initiation of an agreement designed to prevent the imposition of Section 301 tariffs on Vietnamese imports, the U.S. has indicated worries about Hanoi’s implementation of the pact.
In October 2020, the Office of the U.S. Trade Representative (USTR) launched a Section 301 investigation into Vietnam’s actions, policies, and practices concerning timber imports. At that time, the USTR cited evidence suggesting that a substantial portion of the timber imported by Vietnam may have been harvested or traded in violation of Vietnam’s domestic laws, the laws of exporting nations, or international regulations. Vietnam, a major global exporter of wood products, with over $3.7 billion worth of wood furniture shipped to the U.S. in 2019, relies on imported timber from other countries to serve as inputs for its wood products.
One year later, both sides reached an agreement under which the U.S. committed not to impose any Section 301 measures, such as import tariffs. In return, Vietnam pledged to enhance its timber legality assurance system, keep confiscated timber (timber seized for violating domestic or international law) out of the commercial supply chain, verify the legality of domestically harvested timber, regardless of its export destination, and collaborate with high-risk source countries to improve customs enforcement at the border and enhance law enforcement cooperation.
However, a recent update from the USTR suggests that progress in implementing the October 2021 agreement has been sluggish. A USTR statement noted that during the third meeting of the Timber Working Group, which oversees the agreement’s implementation, the two sides discussed relevant technical assistance and capacity-building activities. This discussion may imply that Vietnam is exploring avenues to secure additional resources, potentially from the U.S. or third parties, to fulfill its commitments.
Furthermore, the USTR emphasized the adverse consequences of illegally harvested timber entering the supply chain, particularly on U.S. workers and businesses that adhere to legal and sustainable practices. This emphasis suggests that the Vietnam timber agreement remains a high-priority issue for the U.S., with the possibility of punitive measures if substantial progress is not achieved.
For now, the USTR has committed to closely monitoring Vietnam’s compliance with the timber agreement, highlighting the continued cooperation between the U.S. and Vietnam as they prepare for the fourth meeting of the Timber Working Group.
