This page provides answers to some common questions about the Thailand-EU Voluntary Partnership Agreement negotiations, FLEGT licensing and the Thai timber legality assurance system.
Thailand-EU Voluntary Partnership Agreement
What is the Thailand-EU Voluntary Partnership Agreement (VPA)?
Thailand and the EU are negotiating a Voluntary Partnership Agreement (VPA), which is a legally-binding bilateral trade agreement that aims to improve forest governance and promote trade in legal timber from Thailand to the EU.
- VPAs are among the key tools of the EU Forest Law Enforcement, Government and Trade (FLEGT) Action Plan of 2003. As of March 2020, 15 countries were negotiating or implementing VPAs with the EU.
- Thailand informed the EU of its interest in a VPA in February 2013. The VPA negotiation phase was formally launched on 11 September 2013. Since then, the EU and Thai negotiators met twice via video conference ahead of their first face-to-face negotiations in June 2017. Four joint expert meetings also took place, in 2013, 2017 and 2018, to discuss technical issues.
- The VPA negotiations are expected to take several years. Under the VPA both parties would commit to trading only in legal timber products.
- Among other things, a Thailand-EU VPA would describe a timber legality assurance system capable of verifying the legality of timber products. When fully operational the timber legality assurance system would issue FLEGT licences to accompany Thai exports of verified legal timber products to the EU. Thailand plans to use the system developed with the EU for other markets also, including the domestic market.
- Thailand would then only export FLEGT-licensed timber products to the EU if those products fall under the scope of the VPA. The EU would only allow products that fall under the scope of the VPA to enter the EU if they are accompanied by a valid FLEGT licence. FLEGT-licensed timber is considered as meeting the requirements of the EU Timber Regulation, which prohibits EU importers and domestic producers from placing illegally harvested timber and timber products on the EU market.
- The VPA will include a framework for overseeing, monitoring and evaluating implementation of the VPA and the economic, social and environmental impacts of the VPA. The VPA will also include measures to ensure that imports into Thailand come from legal sources.
How will the VPA be negotiated?
The European Commission (DG Environment) negotiates on behalf of the EU. For Thailand, the negotiations are led by the Ministry of Natural Resources and Environment.
The national VPA negotiation committee comprises representatives of government ministries and agencies. Non-governmental stakeholders observed the first negotiations. Its Subcommittee for Negotiation Preparation includes government, private sector and civil society representatives. Much of the content of the VPA will be decided through deliberations among these national stakeholder groups.
In 2014, Thailand set up an Ad-Hoc Working Group (AHWG), comprising members of each key stakeholder group (government, private sector and civil society) to develop the legality definition. The AHWG’s mandate was later expanded to cover preparation of all VPA annexes. The AHWG established seven multistakeholder working groups for specific VPA annexes and technical issues.
Technical discussions between the EU and Thailand take place through four Joint Expert Meetings, which are led, on the Thai side, by the Director General of the Royal Forestry Department. The parties also held six video conferences.
The VPA process is coordinated by the Thai-EU FLEGT VPA Secretariat Office (TEFSO), which was established by the Royal Forestry Department in 2013 to coordinate and carry out FLEGT-related work in Thailand.
When did VPA negotiations begin?
The VPA negotiation process formally began in September 2013. However, face-to-face negotiations did not take place until June 2017. In the interim, the EU and Thailand interacted through video-conference, one joint-expert meeting and technical missions by the EU FLEGT Facility.
When will VPA negotiations conclude?
Experience from other countries shows that it can take years for VPA negotiations to conclude, and further years to implement the VPA. In VPA processes to date, the period from the start of negotiations to the date the VPA entered into force has been between four and seven years. Several more years of VPA implementation then followed. Indonesia and the EU negotiated their VPA over six years. It took a further three years of implementation before Indonesia could issue FLEGT licences to EU-bound timber exports under the VPA.
The VPA process will take the time necessary to build a consensus among national stakeholders and to design and implement a timber legality assurance system that is robust and credible. It would be wrong to compare the pace of VPA negotiation and implementation between countries as each country’s context and existing timber control system are different.
Which Thai stakeholders and institutions are involved in the VPA process?
The institutions and stakeholders that are involved in the VPA process include the following:
- Government: The national VPA negotiation committee includes representatives of the Ministry of Natural Resources and Environment, and the Royal Forestry Department as well as other ministries and departments such as the Ministry of Commerce, Ministry of Industry, Ministry of Finance, Ministry of Foreign Affairs, Natural Resources and Environmental Crime Suppression Division.
- Private sector: The private sector has followed the VPA process from an early stage – in particular, the Thai Timber Association, Thai Sawmill Association and the Federation of Thai Industry.
- Civil society: The FLEGT Civil Society Network was founded in 2014. At present, the network comprises 65 groups and networks. Most of the member organisations are CSOs, community groups and networks dealing with community forest and land issues. The network also includes private plantation cooperatives and small producers of timber products.
What is the status of the VPA?
The first face-to-face negotiations between Thailand and the EU took place in June 2017, followed by the second negotiations in July 2018. The parties have held four technical expert meetings and six video conferences, during which they discussed technical issues.
Thailand has advanced on drafting several VPA annexes. These include the product scope covered by the VPA, definition of legality including verification procedures, timber legality assurance system, independent audit and conditions governing the release of Thai timber products in the EU market. Work has also advanced on developing supply chain controls.
What is a VPA timber legality assurance system?
Each VPA describes a timber legality assurance system designed to verify the legality of timber from the forest or the point of import through the entire supply chain to the point of final sale or export.
In all VPAs the system includes the following five components:
- Legality definition: The legality definition states the aspects of a VPA partner country’s law for which the timber legality assurance system evaluates evidence of compliance.
- Supply chain controls: Supply chain controls ensure that timber products verified as legal remain legal throughout all processes associated with the supply chain. Supply chain controls also prevent verified legal products being tainted by unverified products entering the supply chain.
- Verification of compliance: Verification of compliance involves checks that all the requirements of the VPA legality definition and supply chain controls have been met to ensure that timber products are legal.
- FLEGT licensing: Once the timber legality assurance system is operational, it will provide for the issuance of a FLEGT licence for each shipment of timber products that is exported to the EU market. Such shipments and their exporters must meet all the requirements set out in the legality definition, supply chain controls and verification procedures.
- Independent audit: An independent auditor will periodically assess the implementation, efficiency and credibility of the timber legality assurance system in order to identify, document and report any non-compliance and weaknesses in the system.
Until Thailand issues FLEGT licences, what requirements must its timber meet to enter the EU market?
Until the start of FLEGT licensing, timber products that Thailand exports to the EU will have to go through the normal due diligence process under the EU Timber Regulation (EUTR), if they fall under the scope of the EUTR. The EUTR prohibits the placing on the market of illegal timber and requires companies placing timber on the EU market to assess and mitigate the risk of illegal timber entering their supply chain. The obligation also applies to timber products made from imported timber in Thailand that are then exported to the EU.
How important is the trade in timber products from Thailand to the EU?
Thailand has historically exported to the EU only a small proportion of its total timber exports. In 2014, the value of Thai wood and wood product exports to the EU was USD 267 million, which amounted to 6% of the country’s total wood and wood product exports (Source: UN Comtrade). It is, however, the EU’s 5th most important trading partner of the 15 countries negotiating or implementing VPAs.
More than 80% of Thailand’s wood and paper exports go to Asia, with a dominant role of China followed by Vietnam, South Korea and Japan. Some of these may have then been re-exported to the EU following processing.
The VPA is an opportunity for Thailand to increase exports to the EU, and improve its access to other markets, including those of countries such as Vietnam and China, which are also engaging with the EU on forest governance issues.
Vietnam, for example, concluded VPA negotiations with the EU in 2017 and both parties ratified the agreement in April 2019.
What products will the Thailand-EU VPA cover?
Products covered by the VPA will include all those required by the EU regulation establishing a FLEGT licensing scheme, which are a minimum requirement for VPAs: logs, sawn timber, railway sleepers, plywood and veneer.
In addition to the minimum requirements of the product scope of a VPA, the VPA will also cover other timber products that Thailand identifies through deliberation among national stakeholders. An annex in the VPA will list the range of products the VPA covers. Thailand has prepared a draft product scope annex, which includes all products covered by the EU Timber Regulation. The matter is still under negotiation.
How useful is the VPA, given that Thailand exports so much timber to non-EU markets?
The VPA is useful with respect to both EU and non-EU markets. Thailand exports about 40% of its timber and timber products to China and Vietnam, both of which are major suppliers to the EU market.
Vietnam is a VPA country, and is starting to implement its timber legality assurance system and strengthened controls on imported timber. China is also engaging with the EU on forest law enforcement and governance. By engaging in a VPA, Thailand therefore aims to meet the rising standards of multiple markets.
- In all VPAs agreed to date, the VPA timber legality assurance system and related regulations apply to all export markets, not just to the EU market.
- With such a commitment, the control and verification of operations will apply to all timber and timber products produced, acquired and/or in circulation in the VPA country.
- Under the FLEGT Action Plan, the EU seeks to work with other major timber consumers to develop a more comprehensive framework to reduce imports of illegally harvested timber.
- Other markets have implemented or are designing measures to eradicate illegal timber from their imports. These markets include the United States, Australia, Japan and South Korea.
How could a VPA boost trade with the EU?
Each VPA describes a timber legality assurance system that, when fully operational, will verify the legality of timber and timber products and issue FLEGT licences to exports bound for the EU. FLEGT licences automatically meet the requirements of the EU Timber Regulation (EUTR). This means operators in the EU can place FLEGT-licensed products on the market without doing further due diligence, thereby saving time and money. FLEGT-licensed products should therefore be more attractive to buyers than equivalent products that do not have FLEGT licences.
What other benefits could a VPA bring
A VPA between Thailand and the EU is expected to bring social, economic and environmental benefits. Experiences from other VPAs show that these benefits can include:
- Improved livelihoods
- Sustainable forest management
- Access to markets
- Improved law enforcement, capacity and governance.
- A level playing-field for business with clear regulations that ensures competition is fair
- Opportunities to modernise industry, adding more value, competitiveness and performance
- Sharing more benefits from forestry operations with local communities
- Reaching Sustainable Development Goal targets
In the Thai context, the government is also interested in increasing the motivation of smallholders to plant trees to achieve financial, ecological and social benefits. This is part of the government’s target of an 8% increase of forest cover.
How will the EU and Thailand oversee VPA implementation?
In each VPA, the EU and the partner country create a joint body to oversee VPA implementation. It is foreseen that Thailand and the EU will establish such a joint body once negotiations are concluded.
How will the impacts of the VPA be monitored?
In all VPAs, the EU and VPA partner country make a joint commitment to monitor the economic, social and environmental effects of the VPA. It is expected that the Thailand-EU VPA will commit to similar monitoring.
Will CITES species be covered by the VPA?
Species listed under the Annexes of CITES play an important role in Thailand. The draft legality definition states that for imported species listed under CITES an operator must follow related CITES legislation to import these species. The same applies to exporting species listed under CITES. The VPA therefore maintains CITES procedures.
Where can I find more information about the national process?
The Thai-EU FLEGT Secretariat Office (TEFSO) maintains the website www.tefso.org. This site contains information about the process, news, upcoming events, minutes of meetings and other documents coming out of the process.