From the perspective of the tropical wood sector, Brexit will have significant implications. The UK is now by far the largest importer of tropical timber in the EU.
If all timber-based products are included (primary raw materials, secondary processed products and tertiary products like furniture), in 2015 the UK accounted for around 25% of the total value imported into the EU from tropical countries. This compares to 15% imported into France, the second largest EU market for tropical timber.
UK import value of tropical timber products increased by 32% from Euro 720 million in 2011 to Euro 960 million in 2015. This is in contrast to other leading EU markets for which, during the same period, tropical timber imports were either flat (Belgium) or declining (all others).
The expected economic slowdown in the UK on the back of the uncertainty after the referendum result is therefore likely to have a disproportionately large impact on the EU’s imports of timber products from tropical countries.
A large part of the recent growth in UK imports of timber products from these countries has been in the form of furniture from Vietnam, Indonesia and Malaysia – a trade now likely to slow in the short to medium term.
Longer term, the prospects for tropical timber products in the UK and the EU will be partly dependent on the speed of underlying economic adjustment and partly on the terms of trade agreed.
If UK recovery is relatively swift, there may be longer term advantages for tropical timber producers (and other non-EU timber product suppliers into the UK) if the new arrangements lead to introduction of tariffs or otherwise impede trade in timber products between the UK and continental Europe’s large and dominant wood product manufacturing sector..
Uncertain policy implications
There are also uncertain policy implications for the timber sector associated with Brexit. UK technical standards for the vast majority of building products are now set at EU level under the terms of the EU Construction Products Regulation.
This situation won’t change any time soon, particularly as even after the UK has left the EU, UK manufacturers selling any product into the EU will have to continue to abide by EU standards. However, the UK’s exit from the EU would open the door to gradual divergence of UK and EU standards for construction and other products.
The same could be said of regulatory requirements like the EU Timber Regulation (EUTR), although again it’s unlikely that there will be any significant change in the terms of this regulation in the UK in the foreseeable future.
The UK in both the public and private sector has been a leading player amongst EU countries to develop measures such as the EUTR, provide political and technical support for FLEGT and promote responsible timber procurement policies. There’s no reason to expect Brexit to lead to a reduction in this level of commitment, nor a reduction in co-operation between EU and UK agencies seeking to address these issues.
Source: ITTO
