Press Release – Wood Council of NZ

All the talk right now is about how export industries in New Zealand benefit from the removal of tariff barriers. Tariff barriers to overseas trade are generally easy to see and their impacts are well understood. The TPPA has done a good job of identifying …Trade Barriers – It’s what you can’t see that really hurts!

All the talk right now is about how export industries in New Zealand benefit from the removal of tariff barriers. Tariff barriers to overseas trade are generally easy to see and their impacts are well understood. The TPPA has done a good job of identifying tariffs and knocking them out. That said, until much more attention is paid to eliminating non-tariff barriers the full benefit of free trade agreements will not be attained.

Non-tariff barriers are effective in restricting access to foreign markets because they are not directly visible and are hard to quantify“, says Brian Stanley, Chair of the Wood Council of New Zealand (Woodco). “This makes them very tricky for exporters to tackle”.

Woodco has released a report today which points to the non-tariff barriers that NZ wood product exporters are up against. The study finds that even when tariffs are low or non-existent, the barriers which remain to NZ wood exports are significant. The removal of these non-tariff barriers will potentially have higher gains for the NZ economy than the removal of tariff barriers.

Non-tariff barriers overseas protect domestic markets and artificially stimulate exports. They can emanate, for example, from government laws, regulations and policies. NZ exporters will
recognize them as red-tape all adding significantly to the cost of doing business overseas.

As tariff barriers fall so non-tariff barriers multiply in their place. The WTO has recently estimated that the number of trade-restrictive measures in effect in 2015 is now around three times greater than the number operating in 2010. “Non-tariff barriers are only growing in number and costing NZ industry millions of dollars. We need the NZ Government to pay urgent attention to overcoming these“, added Mr Stanley.

NZ’s forest and wood sector is particularly exposed to non-tariff barriers in international markets. With 86% of the world’s forests publically owned it is no surprise that overseas governments are heavily involved in subsidising their forest growing and wood processing sectors. In NZ, where forestry and wood processing has been in private hands for decades we have relied upon new technology, efficiency and scale to maintain a competitive edge. Mr Stanley commented, “I am very concerned that there is, however, a limit to how far these technical measures can take the NZ industry when up against an international playing field that is forever tilting against you“.

As an industry we are continuing to run faster to keep pace with competitors in countries where state subsidies and a myriad of other support measures are the norm. We urge our trade officials to read and act upon this report. We must go into trade negotiations with a much more comprehensive understanding of the impact of non-tariff trade barriers and how to remove them“, Mr Stanley concluded.

ENDS

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