Forestry fac­ing trade and so­cial bar­ri­ers

New Zealand Logger - - Forestwood 2018 -

NEW ZEALAND’S FORESTRY PROD­UCTS FACE RIS­ING TRADE bar­ri­ers and mount­ing pres­sures to be more so­cially re­spon­si­ble, ac­cord­ing to out­go­ing WoodCo Chair­man, Brian Stan­ley.

In his fi­nal speech as head of the or­gan­i­sa­tion, made to the ForestWood 2018 con­fer­ence in Welling­ton last month, Mr Stan­ley im­plored gov­ern­ment min­is­ters to in­crease their ef­forts to break down the non-tar­iff bar­ri­ers that ham­per our wood prod­ucts in some overseas mar­kets, par­tic­u­larly those in Asia.

Th­ese have been a hot topic for tim­ber prod­uct ex­porters in re­cent years as New Zealand seeks to es­tab­lish more free trade agree­ments with other coun­tries, only to find that hid­den bar­ri­ers are be­ing used in place of tar­iffs.

Mr Stan­ley says that de­spite agree­ments on and plans to cre­ate a num­ber of free trade agree­ments with im­por­tant mar­kets, the growth in non-tar­iff bar­ri­ers still con­tin­ues.

“A fig­ure I saw re­cently from the WTO shows, on av­er­age, for the G20 coun­tries, an av­er­age of 21 new trade-re­stric­tive mea­sures be­ing cre­ated per month,” he says.

“Free Trade Agree­ments are all well and good but a sus­tained fo­cus on tar­iff re­duc­tions by our trade ne­go­tia­tors will not be suf­fi­cient to open mar­kets and en­cour­age ex­pan­sion of val­ueadding man­u­fac­tur­ing here in NZ. Not while we are up against se­ri­ous sub­sidy regimes overseas that are prop­ping up com­pet­ing man­u­fac­tur­ing de­spite hav­ing been out­lawed by the WTO.

“Hav­ing non-tar­iff bar­ri­ers in our sights is not enough – we must ac­tu­ally pull the trig­ger on th­ese. If man­u­fac­tur­ing sub­sidy regimes are out­lawed by WTO then why can’t we trig­ger WTO in­ter­ven­tion now?”

Mr Stan­ley says New Zealand must con­tinue to press hard for a fairer trad­ing en­vi­ron­ment and “as such, the rec­om­men­da­tions made in the 2016 WoodCo Re­port on Non-Tar­iff Bar­ri­ers to trade have be­come even more ur­gent”.

He adds: “Only the gov­ern­ment can change th­ese rules – they are the only ones with the tool­box full of the req­ui­site tools to fix this. Gov­ern­ment must up the ante on this – overseas sub­si­dies will only erode New Zealand in­dus­try and squan­der op­por­tu­ni­ties for re­gional growth and jobs for the next gen­er­a­tions.”

Our wood prod­ucts also face an­other chal­lenge, ac­cord­ing to Mr Stan­ley. And it’s one that the in­dus­try it­self has the power to act on.

He warns that con­sumers are be­com­ing more aware of and re­sis­tant to prod­ucts that do not meet so­cially re­spon­si­ble or sus­tain­able stan­dards.

Mr Stan­ley told the con­fer­ence: “I’ve been talk­ing to my Aus­tralian col­leagues quite a bit re­cently about this ‘in­tegrity fac­tor’ and both sides of the Tas­man agree that the risks are high where cus­tomer and in­vestor scru­tiny is in­tense and we do not have com­plete over­sight of the whole value chain.

“My mes­sage to you to­day is that we need to be much more re­spon­si­ble as to where our prod­ucts are go­ing, how they are be­ing pro­cessed, trans­formed and mar­keted.”

To il­lus­trate his point, Mr Stan­ley showed con­fer­ence at­ten­dees a video shot last year of a Ra­di­ata Pine log from New Zealand be­ing man­han­dled on an un­guarded saw in a small Asian sawmill in clear vi­o­la­tion of all health and safety rules.

The video was shot late last year and Mr Stan­ley asked the au­di­ence to “watch it through a fil­ter that has the NZ Wood logo in­deli­bly stamped on each com­po­nent be­ing man­u­fac­tured”.

He says: “More and more our overseas mar­kets and in­vestors are say­ing prove that the prod­uct is le­gal, prove that it has caused no en­vi­ron­men­tal or worker harm and prove that it is sup­port­ing a lo­cal com­mu­nity. The pin­cer move­ment here is that, back at home, the New Zealand pub­lic are now de­mand­ing the same per­for­mance from this in­dus­try.

“The forestry sec­tor has al­ways, quite rightly, held it­self up as an in­dus­try of high in­tegrity. The dif­fer­ence now, in a world plac­ing mas­sive de­mands on raw ma­te­ri­als, is that those raw ma­te­ri­als, and the in­dus­tries that trans­form them, must do so much more than merely meet the need for func­tional con­sumer prod­ucts.

“I be­lieve the New Zealand for­est and wood in­dus­try is in poll po­si­tion to meet the needs of so­ci­ety but we must be ex­tremely care­ful with our so­cial li­cence and keep a very close eye on the triple bot­tom line. Can we re­ally af­ford the rep­u­ta­tional risk as­so­ci­ated with what we saw in that video?”

In his fi­nal com­ments, Mr Stan­ley also ex­pressed regrets that dur­ing his time as head of WoodCo there had been lit­tle progress to­wards cre­at­ing a sin­gle, uni­fied body to rep­re­sent the en­tire forestry in­dus­try value chain.

He says: “Two years ago (I said) that it would be great to see a more in­clu­sive in­dus­try body that in­cor­po­rated the en­tire value chain sim­i­lar to AFPA in Aus­tralia.

“How­ever, even though there has been sec­tor dis­cus­sion around this topic we are not there and un­likely to get there in the fore­see­able fu­ture while cur­rent ex­treme mar­ket con­di­tions pre­vail.”

NZL

Brian Stan­ley, Chair­man of WoodCo, warns of trade and con­sumer chal­lenges to sell­ing New Zealand wood prod­ucts.

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