Laos plans to hold talks with the European Union on opening up the market for the country's forest products, in an attempt to source funding to boost the wood processing industry.
Deputy Minister of Agriculture and Forestry Dr Ty Phommasak said yesterday the government was preparing to negotiate with the European Union to sign the Volunteer Partnership Agreement of Forest Law Enforcement Governance and Trade.
Dr Ty made the announcement at the Timber Supply Study Workshop held at the International Cooperation and Training Centre in Vientiane. The EU-funded timber supply study will make recommendations on what Laos needs to do before signing on to the partnership agreement with the European Union.
Dr Ty did not say when Laos would sign the agreement but sources said government leaders want Laos to become a signatory as soon as possible so that more foreign investment can be obtained to develop the wood processing industry.
The partnership would enable Laos to export wood products to European markets, and would be a major factor in enabling the government to attract the necessary foreign investment, technology and skills to boost development of the industry.
Laos has an abundance of forests that can supply the wood processing industry, and it is government policy to stop the export of unprocessed wood. This is aimed at forcing foreign investors to move their production bases to Laos, to add more value to Lao forest products before export.
However, one of the major challenges that Laos faces in attracting foreign investment into the forestry sector – which has some of the greatest investment potential - is access to international markets. Laos will need to improve its laws and regulations on environmental protection before its forest products can be widely exported.
Dr Ty said that once Laos has signed the partnership agreement with the European Union, it will have to strictly comply with the rules of membership on managing the use of forest products to ensure sustainable supply.
Sustainable supply of this natural resource will benefit Lao people, especially those who rely on forests to reduce their poverty.
A number of Lao furniture makers have urged the government to stop the export of timber so they have unlimited access to wood. They also want the government to disclose the exact amount of wood that it can supply to the local industry, so they can sign purchasing agreements with overseas buyers. They have complained that distribution of the timber quota is unfair, saying that some Lao furniture makers are not included in the quota and have to buy wood from illegal loggers.
Government officials say it is difficult to disclose the exact amount of timber allocated under the quota each year, as it is based on the capacity of forests.
Every year government officials inspect forests nationwide and identify which trees can be cut, to ensure the sustainable use of forest resources.