Brexit Rattles RI-European Timber Trade Prospects

Jakarta, Indonesia: According to The Jakarta Post, shortly after the UK people voted on June 24 to leave the European Union, the country witnessed a change of prime minister and economic uncertainties radiated around the globe. 

For timber traders and advocates of environmental sustainability in Indonesia, this development was a major concern. The country was about to clear the final hurdle toward getting the Forest Law Enforcement, Governance and Trade (FLEGT) license for its timber trade. The license would allow Indonesia’s timber to enter the EU easily, bypassing strict EU timber regulation requirements. 

This was made possible in April, when President Joko “Jokowi” Widodo met European Commission president Jean-Claude Juncker in Brussels and agreed to smoothen the FLEGT licensing path for Indonesian timber. 

The repercussions of Brexit may affect the terms of this licensing. Sustainability and legality are main issues in managing forest and timber products. These issues are especially a concern in Indonesia, which has 69 million hectares of production forest, of which 36 million hectares are under forest concession permits. 

With Brexit, there will be at least two types of impact on Indonesian forests: economic and political. 

Economists predict Brexit will slow down the UK economy as well as those across the EU and China. Indonesia’s timber exports to the EU reached US$609 million in 2015, but with Brexit they could shrink by two percent, $12 million, this year. 

After Brexit, there are doubts about the UK’s political influence to push through this FLEGT licensing process among SVLK stakeholders in EU member states by the end of this year.


FDMAsia About Us

For almost 30 years, FDM Asia has been the publication of choice for woodworking professionals in Asia Pacific, providing the latest news and expert insights of a diverse range of topics including process technologies, furniture production, panels manufacturing, raw materials handling and sustainability issues.

We have one of the most comprehensive woodworking database and e-media programme to assist you in your e-marketing and give you an exclusive opportunity to connect to our 25,152 online subscribers.