WPMA on the warpath over rising protectionism
TIMBER EXPORTERS IN THE REGIONS are among those feeling the effects of increasing protectionism, according to the Wood Processors and Manufacturers Association (WPMA).
The organisation has begun a series of visits to key wood processing areas around the country to harness support for its campaign to keep trade doors open.
It recently held meetings in Nelson and Northland, where attendees were warned that whilst major tariff barriers had largely been brought down for wood products in a number of markets a “vast wall of non-tariff barriers have been put up in their place”.
WPMA describes these non-tariff barriers as “irritating and costly procedures you have to go through to get products into market”.
It says these can include customs delays, licence fees, quarantine requirements, certification fees, labelling costs, domestic taxes and much more.
It also believes that many are illegal and could be challenged.
“According to the WTO this list just keeps growing .... and don’t we know it!” says Dr Jon Tanner, Chief Executive of the WPMA.
“We told the Government this back in 2016 and they have responded with a new trade policy called Trade Agenda 2030. This promises to knock down those non-tariff barriers that are holding business back. Job done? Partly.
“What WPMA is doing now (the focus of our regional meetings) is to draw attention to the massive subsidies paid overseas to manufacturers who compete against us. When NZ rightly did away with its manufacturing subsidies back in the 1980s the rest of the world was to follow suit. Guess what: they didn’t! The result is that manufacturing subsidies are still rife across the world.”
Government Minister, Nick Smith, who is MP for Nelson, attended the local meeting and told the audience the industry needed to toughen up, get out there and compete harder.
“If toughening up means what I think it does then we need to continue to become ever more efficient by the day, cut costs further and innovate to deliver new products and services,” says Dr Tanner.
“Sure, that seems to be the standard NZ remedy. However, this is where MBIE’s latest statistics on the wood sector make interesting reading. What we showed in Nelson and Northland is that the NZ wood and paper sector already displays the highest labour productivity in the land – 17.9% higher than total industry.
“We are one of the fastest adopters of new technologies. In other words, we are running fast and we’re smart. But are we keeping up? The same MBIE figures suggest not, with other vital statistics for the sector looking pretty flat over the past few years.
“Our argument is that we are, in fact, a shining example of a NZ manufacturing industry that has/is/continues to ‘toughen up’.
“The problem is that our competition keeps reaching for the ‘protection-enhancing’ subsidies. World wood trade is not operating in a free market. We are not asking for subsidies to match our competitors but we are asking for fairer trading conditions.”
Dr Tanner says many of the subsidies are likely to be illegal in the eyes of the WTO and the WPMA is currently testing this and will be talking further to the Trade Minister about its findings.