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Forest Products Lobbying Wins Major Apec Success

APEC is now committed to fast-tracking the removal of tariffs on forest products.

The decision released today in an APEC Trade Minister communiqu confirms that the APEC group is now committed to:

1. Incorporating industrial products - which includes forest products - onto the agenda for the World Trade Organisation (WTO) meetings in Seattle in November and December this year

2. The WTO undertaking a focused three-year round of negotiations to comprehensively free up global trade in agricultural and industrial products as well as services

3. The Accelerated Tariff Liberalisation initiative launching the WTO round, allowing for early implementation of forest product tariff reductions in 2000 ahead of the conclusion of the round(in 2003).

Mr Devon McLean, Chair of the New Zealand Forest Industries Council, states that this significant win is largely due to the skilful lobbying from of Trade Minister, Lockwood Smith and the New Zealand negotiators.

"The Trade Minister's communiqu confirms a consensus of regional trading partners to accelerating the creation of a liberalised market for forest products by the middle of the next decade. This would stimulate billions of dollars of new processing investment in New Zealand. It would also accelerate research investments in new product development and innovation," said Mr McLean.

Low import tariffs for forestry commodities in markets like Japan, China, India and Korea have meant that logs and other items like wood pulp and newsprint have developed as significant proportions of New Zealand's total production and exports.

"The high tariffs for value added products (15-50 percent in some lines) in many Asian economies, combined with non-tariff measures such as prescriptive building codes, currently seriously handicap our ability to be competitive suppliers of high value products and further develop our manufacturing capability," noted Mr McLean.

He continued, "A Forest Industries Council study on the industry's international competitiveness - released by Forest Research on Monday 6 September - noted that this tariff situation could stall further significant processing investment in this country."

Mr McLean stated achieving a freer regional market for manufactured forest products was `critical' for the New Zealand industry's ongoing development. As well as stimulating industrial growth it would enable the forest industry to capitalise on its competitiveness on wood fibre, energy, labour and transport inputs - as well as its sustainable managed planted forests and proximity to Asia, which has the world's fastest growing forest products markets.

"We have made significant progress in improving our international position since deregulation started in the mid 1980's. Over the past 15 years, forest product exports in value terms have grown fourfold to $2.4 billion at an annual growth rate of 14 percent. We need more investment however to be able to process on-shore our expanding harvest," said Mr McLean.

"A liberalised international trading environment will lead to New Zealand's forest industry becoming an increasingly important contributor to New Zealand's economic growth and a significant force in the regional forest product market."


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