Hong Kong trade talks positive for NZ forestry

21 Dec 2005

New Zealand forest owners expect their industry will benefit from progress made in World Trade Organisation talks in Hong Kong last week.

"It won't happen in a hurry, but negotiations on tariff reductions for forest products are an integral part of the WTO's non-agricultural market access negotiations," says NZFOA chief executive David Rhodes.

"The successful conclusion of the Hong Kong talks keeps the Doha round of negotiations alive and on track for conclusion by mid-2007 — possibly earlier."

The development of the NZ forest industry is being hindered in many markets by tariffs which escalate as more value is added to the raw material. Raw logs and sawn timber attract low or zero tariffs. Tariffs on wood panels, designer furniture, kitset homes and paper products are as high as 40 per cent.

"Lower tariffs would enable New Zealand and other forest producers to become more competitive and encourage them to invest in the further processing of forest products at home," he says.

"While New Zealand will probably always export some logs, there is a potential to add value to a greater proportion of the harvest, thereby creating jobs and wealth in New Zealand. Stronger demand for logs from processors would also improve the economics of forestry as a land use."

In Hong Kong, world trade ministers agreed to a Swiss formula which will be used to cut tariffs across the board. This will see higher tariffs cut faster than lower ones, with differing maximum tariff levels for developed and developing countries. They also agreed to develop a sectoral approach to tariff reductions.

"This is particularly important because, if a majority of participants in the sector agree, this could result in faster and deeper cuts to forest product tariffs," Mr Rhodes says.

He points out that it is therefore important to keep forest products uppermost in the minds of trade ministers and to form a common front among forest product producers.

To this end, New Zealand, through a cooperative arrangement between government and industry, has been a prime mover in setting up the Santa Catalina Group of forest industry associations from Australia, Canada, Chile, New Zealand, South Africa and the United States. And at the Hong Kong meeting, the group hosted a roundtable meeting with world trade ministers.

Special trade adviser Stephen Jacobi convened the roundtable on behalf of the forest industry and represented NZFOA and Wood Processors Association at the talks.

He says the Santa Catalina Group told the ministers that freer trade in forest products would be good for business, good for development and good for the environment. They were urged to take decisive action to open up international markets for wood and paper products.

"This built on the negotiating proposal for trade liberalisation in the forest products sector submitted on 18 October to the WTO by the governments of Canada, Hong Kong, China, New Zealand, Thailand and the United States.

"We have had a lot of positive support from the New Zealand Government, which fully understands the importance of this issue to the NZ forest industry and the economy as a whole."

He points out that all countries stand to gain significantly from freer trade in forest products. Of the world's 20 leading forest product exporters, 12 are developing countries.

"Further trade liberalisation could provide them with significant benefits in the form of increased trade, investment in added value production and job creation in rural communities.

"It will increase the value of forests and provides revenue so that land can be maintained in forest production. It will also help encourage the sustainable management practices which are strongly supported by the New Zealand industry and are being adopted by responsible forest owners worldwide."


For more information, please contact:

David Rhodes, chief executive, NZFOA Tel: 04 473 4769. Mobile: 0274 955 525