China is getting all the advantages from the Free Trade Agreement (FTA) between it and New Zealand, according to the forestry industry – and it wants the government to step in. Source: Radio New Zealand
The Wood Council is looking for government support to challenge China at the World Trade Organisation if necessary.
The council said, as far as its industry was concerned, there was no FTA because of the non-tariff barriers China placed on its products.
Non-tariff barriers include regulations such as technical registrations and standards, price control measures, forest management certification and product labelling.
The council was particularly concerned by the adoption of building codes and standards that did not consider New Zealand radiata pine.
China also applied a 17% import value-added tax on sawn wood, or value-added wood products, but the council claimed in some parts of China there was no tax on logs.
It said this reduced forest processors’ ability to compete with China’s domestic manufacturers.
Wood Council chairman Brian Stanley said he wanted the government to raise the issue of these barriers when the FTA was reviewed this year.
He said FTAs should benefit both parties and he did not believe China was playing fair.
“China’s getting all the advantages and New Zealand’s not getting much in our industry,” he said.
Mr Stanley said forestry exports were not competing on a level playing field, and the non-tariff barriers distorted international trade by either protecting domestically produced products from foreign competition or artificially stimulating exports of those products.
He also said the industry could potentially be losing millions of dollars and there was a risk to jobs if things did not get better.
“Most of our sawmills are in the regions and it’s regional jobs that would suffer – if we could get a lot more sawn timber in the regions, we’ll get more jobs in the regions,” he said.
One timber exporter told RNZ News that the government was in denial on the issue.
David Turner, who is the executive director of Sequal Lumber in Kawerau, said his company’s growth had taken a hit and the government needed to talk to China.
“The government’s been in denial for some time, and if you look at some of the reports that the Treasury has written you’ll see that they generally assume that there’s some sort of processing efficiency that’s achieved in China due to labour costs,” he said.
“We have a competitive advantage to process here in New Zealand in the primary processing stage.”
Mr Turner said he was worried similar problems could arise with future trade deals.
The Wood Council has released a number of recommendations for the government in a report on the non-tariff barriers and their impact on New Zealand’s forestry processors.
New Zealand International Business Forum executive director Stephen Jacobi said non-tariff barriers were a new frontier for trade policy.
“The best option is the China FTA upgrade. It’s something that’s already in train that both governments want to move on,” he said.
“We need to make sure forestry gets its share of that upgrade, which is why it’s great that the industry has come out with this report right now.”
