Friday 23 September 2016 08:20 AM
Wood processors push for faster trade refresh in face of foreign subsidies
By Paul McBeth
Sept. 23 (BusinessDesk) - New Zealand wood processors and manufacturers want the government to speed up a refresh of the nation's trade policy as other countries offer more support to their forestry sectors.
Trade Minister Todd McClay plans to tilt policy to focus on squeezing more from existing free trade agreements rather than simply pursuing new deals. He argues this will be more effective in pulling down non-tariff barriers, government measures to either protect a domestic industry or prop up exports. Wood Processors and Manufacturers Association (WPMA) chairman Brian Stanley told a regional meeting in Wellington that refresh needs to be "urgent" and "substantial" because other nations are giving more support to their industries.
"In the past, New Zealand has been at the forefront of global free trade, but we need to accept New Zealand's original drive hasn't been adopted to the degree it needs to be," Stanley said. "Protectionism is rapidly on the rise again."
One of those threats highlighted at the meeting was from Japan, which plans to expand production capacity of wood building product cross-laminated timber (CLT) to 500,000 cubic metres by 2024 through government subsidies for new factories, import tariffs and export subsidies.
Associate Primary Industries Minister Jo Goodhew told the meeting a number of ministers with economic portfolios were working on the refresh, which will extend beyond the Ministry of Foreign Affairs and Trade, and that the reason more non-tariff barriers were emerging was because there were more free trade agreements.
Logs, wood, and wood articles are New Zealand's third-biggest commodity export with $3.86 billion in the year ended July 31, a 10 percent gain from a year earlier. Wood pulp and waste paper exports were up 4.3 percent in the year to $739 million while paper, paperboard, and articles rose 9.1 percent to $494 million.
Ministry for Primary Industries figures show 43 percent of the $4.75 billion of forestry product exports in 2015 were logs and wood chips, and Goodhew said there was room to lift the level of processed goods being sold overseas.
Building products CLT and laminated veneer lumber (LVL) were touted as value-add wood products New Zealand can develop to lift the value of those exports, and also in reducing costs for the country's construction sector, with the products as resilient as concrete, faster to erect, and more energy efficient.