Nearly two years after the reaching an agreement that avoided Section 301 tariffs on imports from Vietnam, the U.S. indicated concerns about Hanoi’s implementation of that agreement.
In October 2020 the Office of the U.S. Trade Representative initiated a Section 301 investigation into Vietnam’s acts, policies, and practices related to timber imports. At the time, USTR said available evidence suggested that a significant portion of the timber Vietnam imports has been harvested or traded in violation of Vietnam’s domestic laws, the laws of exporting countries, or international rules. Vietnam is one of the world’s largest exporters of wood products, with more than $3.7 billion worth of wood furniture shipped to the U.S. in 2019, and relies on imports of timber harvested in other countries to supply inputs for those products.
A year later the two sides struck an agreement under which the U.S. agreed not to impose any Section 301 measures (e.g., import tariffs) in return for commitments by Vietnam to improve its timber legality assurance system, keep confiscated timber (i.e., timber seized for violating domestic or international law) out of the commercial supply chain, verify the legality of domestically harvested timber regardless of export destination, and work with high-risk source countries to improve customs enforcement at the border and law enforcement collaboration.
Officials recently held the third meeting of the Timber Working Group that oversees implementation of the October 2021 agreement, and a readout from USTR suggested that progress has been slow. USTR noted that the two sides “discussed relevant technical assistance and capacity building activities,” possibly indicating that Vietnam is seeking more money and other resources from the U.S. (or perhaps third parties) to fulfill its commitments. USTR also made a point of emphasizing that “the presence of illegally harvested timber in the supply chain disadvantages U.S. workers and businesses who use lawful and sustainable means to make their goods,” which could be a signal that the Vietnam agreement remains a priority issue for the U.S. and that punitive measures are a possibility if sufficient progress is not made.
For now, however, USTR simply said that it “will continue to closely monitor Vietnam’s implementation of the timber agreement and that the U.S. and Vietnam will “continue close cooperation in advance of a fourth Timber Working Group meeting.”
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