Forest Industries Welcome China FTA Prospect

Forest Industries Welcome Prospect Of Free Trade Agreement With China

The New Zealand Forest Industries Council (NZFIC) welcomes the Government’s conclusion of a Trade and Economic Co-operation Agreement with China as a first step towards negotiating a comprehensive free trade agreement (FTA).

“China is already New Zealand’s fifth largest market for forest and wood products exports. In the year to December 2003 the Chinese market was worth NZ$245 million and there are opportunities to grow this substantially in years to come,” said New Zealand Forest Industries Council Chairman Devon McLean.

Mr McLean said that the prospect of a trade agreement was good news because tariff escalation is a problem in the China market. Tariff escalation occurs when tariffs on processed products are higher than raw materials. “The Chinese made welcome reductions to tariffs when they joined the World Trade Organization, but we expect the Government to make the complete elimination of tariffs on all forest wood and paper products a priority in any FTA negotiations,” said Mr McLean.

Mr McLean also cautioned that difficulties over the recognition of Pinus Radiata in the new Chinese Building Code was a major potential sticking point. “We had thought that these difficulties were resolved but unfortunately they have not been,” he said.

“While the recognition achieved in the Code was welcome, ongoing discrimination against Pinus Radiata stands in the way of our industry taking full advantage of the growth in the use of wood as a construction material in China. Currently we are working with the Chinese on a handbook for wood construction but until market access under the building code is definitively secured, our ability to identify new commercial opportunities will be hampered,” said Mr McLean.

Mr McLean said that the NZFIC is looking forward to working closely with the Government on the proposed feasibility study on an FTA and throughout any negotiation.

“This is a development of enormous strategic importance for New Zealand’s future. If handled correctly an FTA with China will be worth many millions of dollars in increased export earnings for the New Zealand forest and wood products industry,” concluded Mr McLean.

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