Lacey Act and Forest Certification have begun to implement blocked furniture exports

Following the US Lacey Act, the EU's “Wood and Wood Products Regulations and New Environmental Design Directives”, which were formally enforced since March 3, have added to the resistance of our province's furniture exports. The new EU directive requires all manufacturers on the timber production, processing and sales chain to export to the EU in the future to obtain the FSC (forest certification) “identity card”, that is, the source of timber, country and forest, wood volume and weight, logs must be submitted. Basic information such as the supplier's name and address, etc., which proves the legality of the timber source. Affected by this, in March and April of this year, furniture exports to the EU showed a year-on-year decline for two consecutive months. According to the latest data from Hangzhou Customs, Zhejiang furniture exports in March reached 250 million US dollars, down 9.8% year-on-year. Exports in April were 230 million US dollars, down 2.8% year-on-year.

The rapid development of the world timber industry has brought about prominent problems such as illegal logging. In order to curb illegal logging activities, the EU Timber Regulations, which was enacted by the European Union in October 2010, was enacted on March 3, 2013. The new regulations require that all timber products entering the EU market have legitimacy, that is, all timber producers and importers in the EU-27 must pass “due diligence” to ensure that all timber products entering the EU market are legal. Sexuality, requiring all manufacturers of timber products to the EU to establish traceable chain of supply chain of custody. China is the world's largest producer and trading country of timber products. It is also the most important importer of timber products in the EU market. The implementation of the EU's new timber bill will have a significant impact on the development of Chinese timber companies, especially small and medium-sized enterprises.

Impact - SMEs are the subject of the new bill

In recent years, China’s merchandise exports have frequently encountered barriers. It is reported that the EU's new timber regulations officially implemented in the EU have further improved the barriers to the export of wood products in China.

As the most important importer of timber products in the EU market, and because SMEs occupy a very important position in China's timber industry, the implementation of the EU's new timber bill will definitely have a significant impact on China's timber SMEs. According to statistics, in 2008, there were 127,900 enterprises in the timber industry in China, including 125,500 small and medium-sized enterprises, accounting for 98.07% of the total number of enterprises. SMEs also played an important role in the export of China's timber industry. In 2008, China's timber industry export enterprises 4014, of which 3,854 are SMEs.

According to industry analysts, the starting point of this regulation is to resist illegal logging of forests, which is of positive significance for solving the current problems of global forest degradation and climate warming. In addition, the new regulations can improve the market competitiveness of legal timber, and guide enterprises to use legal timber as raw materials, effectively reducing the vicious competition in the market caused by illegal logging. This new barrier to the EU timber and wood products trade is related to the survival of enterprises, and Chinese export companies have felt "pressureful."

Worry - the meaning of drunkenness refers directly to Chinese manufacturing

China is the world's largest exporter of wood products, with exports of furniture, wood-based panels, flooring and wood products ranking first in the world. The EU is the second largest export market for wood products in China. In 2011, wood products exported to the EU accounted for nearly a quarter of China's total exports of wood products.

Some experts pointed out that the new wood regulations will not only make it difficult for some wood and wood products produced by some developing countries to enter the EU market, but also directly lead to the rise of raw material costs for wood furniture and wood products enterprises, as well as the cost of enterprise management. It is understood that due to the lack of forest resources in China, the domestic timber supply and demand gap is largely dependent on imports. From 2009 to 2010, China imported a total of 370 million cubic meters of timber. In 2010, China's total imports of wood products reached US$11.2 billion, making it the world's second largest importer of wood products. China's timber imports are mainly from developing countries, including Russia, Thailand, Papua New Guinea, Solomon Islands and Gabon. The forest protection legal systems in these countries are not yet sound, and there is a serious problem of deforestation. It is difficult to provide effective legal proof of timber. It is considered to be the source of illegal logging of the world's wood. After the implementation of this regulation, wood products produced from wood from these sources will be difficult to enter the European market, and those that cannot adjust the source of timber will even be forced to withdraw from the European market.

Globally, only about 10% of FSC certified wood is available. As far as China is concerned, less than 1% of the wood is certified on the market. Experts believe that the EU's new timber regulations as a new "green barrier" will undoubtedly raise the threshold for the export of wood products such as furniture and flooring.

Pressure - the timber industry faces "big waves"

What is the impact of the EU's new directive on China's flooring companies? Many companies have analyzed that after the implementation of the new EU regulations, the FSC forest supply certification has fewer raw materials, which will inevitably lead to increased procurement costs and additional certification fees. Therefore, the implementation of the new policy, the wood products industry may be shuffled, will have a greater impact on export enterprises, especially small and medium-sized export enterprises, and may even force related companies to withdraw from the European market.

Experts analyzed that the implementation of the EU's new timber bill has significant differences on the impact of enterprises of different scales, and the adverse impact on small-scale enterprises is relatively heavy, while the degree of adverse impact on large-scale enterprises is relatively light, which may promote Larger companies are taking active measures to adjust, while smaller companies may abandon the EU market and even exit the timber industry. China's timber product export enterprises will further transform to large-scale enterprises, and the scale of enterprises will be further concentrated in the direction of large enterprises. The average size of enterprises in various industries will further expand.

Experts remind that compared with 2008, the raw material costs and labor costs of China's timber SMEs have increased significantly in recent years. The negative impact of the implementation of the new EU regulations will also worsen the operating environment of SMEs in the timber industry. , its adverse effects will be superimposed and enlarged.

The implementation of the new EU regulations indicates that the EU market will firmly say “no” to the import of illegal timber and wood products. This is undoubtedly a severe test for Chinese timber companies, and it also forces the Chinese market to be standardized. Faced with the increasing industry standards in the international market, some insiders believe that it is a challenge and an opportunity. The new regulations will help to promote the transformation and upgrading of China's timber industry, and establish a convenient and efficient domestic response system and a timber certification system with Chinese characteristics.

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