Western countries have been regarding our country as one with a high risk of illegal logging. In recent years, Regulation of Timber & Timber Products and New Environment-friendly Design Instruction has been compulsorily implemented by the EU. For our country, it has impaired the competitiveness of timber products that are exported to the EU market, such as timber furniture. Meanwhile, it has a major impact on timber product industries such as timber furniture in our country.

Large-scale Cost Increase of Timber Products Export

First of all, enterprises have to invest a great deal of capital and manpower to carry out technological reform and improve the environmental quality. Second, transportation cost of raw materials will increase. Due to the limited number of local tree farms that have passed FSC certification, cost of raw materials purchase in other places will greatly increase after EU clients raise requirements. Third, certification cost will increase. Enterprises will increase the expenses of related examination, test, certification and public relations and other related expenses. What's more, the cost of importing raw materials will increase. The cost of imported timber which obtained certification will be 10% higher than that of common imported timber. The above conditions undoubtedly increase the cost, which is a great challenge for enterprises.

It becomes more difficult for timber furniture enterprises such as timber door to gain FSC certification.

In the worldwide scope, at present, only 10% of timber obtained the certification. In terms of China, due to the fact that forest certification in our country just starts, less than 1% of the timber in the market has gained the certification. And the new regulation requires timber products imported to EU market gain the certification of FSC. However, the standard of FSC does not accord with that of other countries, which brings great difficulty of gaining validity attestation or certification. Timber and timber products that cannot provide sufficient validity attestation will be hindered by EU.

Threshold of Timber Products Exported to EU Greatly Improves

Some domestic enterprises have to import log and timber products from Russia, Malaysia, Indonesia, Solomon Islands and Papua New Guinea. Among these supply countries, illegal logging exists in some countries. Hence, the EU's requirements of log "ID card" may make some furniture enterprises lose orders. Management laws and regulations vary in different countries. Hence, it is difficult to prove whether the source of timber is legal and that of some imported timber cannot be checked, which will have greater impact on timber export enterprises in our countries, especially middle-sized and small-sized timber export enterprises and even compel them to exit from the European market.

Export Customs Clearance of Timber Products Will Suffer from Greater Impact

After the new regulation of EU is compulsorily implemented, customs of EU countries make have stricter examination of the imported timber products. On the basis of the original complicated customs clearance procedures, verification content of "responsible investigation" is added, which is bound to increase of customs cost of manufacturing enterprises of exported timber products and is bad for convenient customs clearance. Meanwhile, it also greatly increases the discretionary power of EU port authorities to domestic timber products exported to EU, thus leaving broad imagination space for its adoption of trade restrictions.

The new regulation will lead to great negative impact on domestic EU-exported furniture industry in the short run. However, in the long run, it is both challenge and opportunity. The new regulation will do good to standards and product quality of timber furniture export market of our country, which not only benefits the future development of timber furniture industry in our country, but also effectively standardizes the market, further weeds out the backward and nonstandard middle-sized and small-sized enterprises, boosts transformation and upgrade of timber industry and improves the quality, grade and international competitiveness of export products of timber furniture industry in our country.

*This article was published on chinadaily.com