ASEAN: Regional Trends in Economic Integration, Export ... - USITC

more focused on its own large and growing domestic market, which could actually
restore ASEAN competitiveness elsewhere and/or provide new opportunities for ASEAN
hardwood plywood in China. 40 Another analyst suggests that, by driving down wood
flooring prices, the success of Chinese wood flooring exports has also made a wider
range of flooring choices, including tropical wood flooring made in ASEAN countries,
available to global consumers. 41
The ability to meet product standards is important to the international competitiveness of
ASEAN hardwood plywood and flooring producers, but there are no ASEAN-wide
standards, and little progress to date has been made on harmonizing standards in the
region. 42 Instead, product standards are imposed on hardwood plywood and flooring
products in a number of major ASEAN export markets, where they are focused on
performance or appearance (depending upon end use). Plywood used for concrete
forming or structural applications must meet specific standards in Japan, Canada, the
United States, and the EU. Hardwood plywood is often graded according to grading
standards maintained by the associations in the importing countries. Compliance is
verified by accredited independent testing agencies, and for some standards, testing labs
have been approved in the ASEAN region. However, testing and certification
requirements reportedly create delays and bottlenecks for ASEAN exports. 43
Hardwood plywood, engineered flooring, and laminated wood flooring products must
meet strict formaldehyde emission standards in Japan, Europe, and, most recently, the
United States. In 2007, the state of California implemented restrictive formaldehyde
emission standards for plywood, reconstituted wood products (e.g., particleboard,
medium-density fiberboard, hardboard), and for products made from those materials.
ASEAN producers, like all producers selling into the California market, must meet the
state’s formaldehyde emissions standards and be certified by a California-approved
certification agency. 44 One Indonesian certifier, the only one approved by the state of
California in ASEAN, has certified 25 producers in Indonesia and 10 producers in
Malaysia. An additional 9 facilities in Malaysia and 2 in Vietnam have also been certified
by U.S.- and Hong Kong-based agencies. On July 7, 2010, President Obama signed into
law the Formaldehyde Standards for Composite Wood Act that establishes national
emission standards similar to those in California and will require all plywood and
composite wood products sold in the United States to be certified as compliant with the
new national standards. 45
Regional Integration
As of January 1, 2010, intra-ASEAN tariffs on hardwood plywood and flooring were
scheduled to become zero in all but the four least developed countries (Burma,
Cambodia, Laos, and Vietnam). It is too early to assess the effects of tariff reductions on
intra-ASEAN trade in hardwood plywood and flooring, but other equally or more
40 Industry representative, telephone interview by USITC staff, February 11, 2010.
41 Oliver, “Monitoring the Competitiveness of Tropical Timber,” 65.
42 ASEAN official, interview by USITC staff, March 1, 2010. ASEAN work on wood products standards
is pursued through the ASEAN Expert Group on Research and Development in Forest Products.
43 Industry representative, interview by USITC staff, Kuala Lumpur, March 12, 2010.
44 The California Air Resources Board (CARB) rule requires producers of composite wood products and
products made with them that are sold in California to be certified by a third-party testing agency accredited
by CARB. See CARB Web site: http://www.arb.ca.gov/toxics/compwood/tpc/listofmills.htm (accessed
March 20, 2010).
45 Public Law 111-199, 124 Stat. 1359.
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