20 November 2014
Limited benefits for wood products in Korean FTA
At its meeting today the Wood Council of NZ (Woodco) said tariffs will continue to restrict trade in processed wood
products despite the signing of a FTA with South Korea.
“We know how hard government negotiators have strived to achieve a high quality deal with Korea. For the forest industry
the job is far from finished, but the proposed agreement is a good start,” says Woodco chair Bill McCallum. Woodco is
the pan-industry body representing the interests of all parts of the forest and wood processing value-chain.
New Zealand exported NZ$503 million of forestry products to Korea in the year ending June 2014. Under the FTA more than
99 percent of New Zealand’s current export wood product lines will be duty-free within 10 years.
“But ten years is a long time in business and while a 10 per cent tariff may not sound significant, on price-sensitive
products it can be enough to eliminate trade. This is compounded by the fact that some other wood exporting countries
already enjoy tariff-free entry into Korea.”
Mr McCallum says the forestry and wood processing industries on a “business as usual” basis will deliver $6 billion a
year in export earnings to New Zealand by 2022.
“The vision in the Woodco Strategic Action Plan is to double this to $12 billion over the same period, largely by
converting a higher proportion of logs to higher value products for sale locally and on world markets.
“But we can’t do this alone. Only the government can negotiate the tariff-free access we need to compete. Tariffs are
generally very low on logs and escalate as value is added – effectively shutting our processed wood products out of many
markets.”
He says free trade agreements between New Zealand and other countries have tended to headline the benefits for dairy,
meat and horticultural exports.
“While we welcome the gains the farming sector has achieved, we do encourage greater priority be given to improved
access for forest products. We are currently the country’s third largest export industry, but the industry’s common
objective is to substantially increase the proportion of wood products that add value on-shore.
“Think of the potential for employment, regional development and national wealth creation that would result from
processing more logs into value-added products. We urge our trade negotiators to work hard to achieve elimination of
tariffs on all processed wood products.”
ENDS