Forestry facing trade and social barriers
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.”
Brian Stanley, Chairman of WoodCo, warns of trade and consumer challenges to selling New Zealand wood products.