US-Vietnam deal will boost timber exports

By PAULA OLIVER

A trade agreement between old foes Vietnam and the United States should have a positive spinoff for local timber exporters.

After four years of negotiations, Washington and Hanoi reached agreement last month on a deal to reduce tariffs on goods and services and improve investment relations between the two countries.

A spokesman for the New Zealand Timber Industry Federation, Kevin Hing, said the trickle-down effect could be positive for local timber exporters, because Vietnamese demand for New Zealand timber was likely to grow.

"The duty on wooden furniture exports from Vietnam to the US will fall from 33 per cent to 3 per cent over three years," he said.

"That's good for us, because they will need more timber to feed their growing export market."

New Zealand timber is used to make furniture, trinkets, toys and picture frames in Vietnam, most of which are exported.

Mr Hing said the Vietnamese market was tiny in comparison to other Asian markets, but it was "coming along nicely."

New Zealand timber exports were worth $3 million a year.

Efforts had been made to increase exports to the communist country since 1997, when an industry group established initial contact. Since then, a large Vietnamese furniture manufacturer had visited New Zealand and placed orders after touring local sawmills.

Frank Wilson, the director of the Ministry of Foreign Affairs and Trade's Southeast Asia division, said New Zealand would be likely to experience a "double whammy" effect should the agreement be ratified, because its tariffs into Vietnam would also be reduced.

"So the agreement is a positive for everybody."