New Zealand Logger
Consolidating trade access to China
THE RECENT UPGRADE OF THE CHINA Free Trade Agreement is a much awaited and vital step for the future of New Zealand primary exports globally, says the Forest Owners Association (FOA).
Our forest and wood products industry exports $3.3 billion of forest products a year to China. Like most of the other parts of the primary sector, forestry relies heavily on China, says FOA President, Phil Taylor.
“New Zealand signing the Upgrade on the Free Trade Agreement, not only brings immediate benefits to our industry, but is a reminder of the value of mutually agreed rules-based trade agreements globally.
“The first impact in China will be through lower duties and streamlined documentation. In the longer term, it consolidates our trade access into China and opens the way for more processed timber exports going there and increasing our current 10% of imported market share in China of forest products.
“Our industry participated in a major forest industry delegation to China in 2018, to play our role in improving our access to China, and this government-led effort then is producing results now.”
He adds that the global significance of the Upgrade lies in the context of threats to free trade in the post-COVID trading world: “Protectionism was gaining traction in so many countries before the pandemic, and it’s showing many signs of now getting worse in economies hit hard by COVID.
“The New Zealand forest industry has been identified by government as increasing further processed exports by $2.6 billion in the next ten years. Our government needs to make sure that the markets which have the potential to buy these exports are not closed to us. More rules-based trade deals to keep those doors open are vital.”
The upgraded free trade agreement is part of the Government’s Trade Recovery Strategy, in response to the economic shock of COVID-19.
Key outcomes of the upgrade include new rules that will make exporting to China easier and reduce compliance costs for New Zealand exports, a better deal for our services exporters through expanded market access and most-favoured nation commitments, and the introduction of environmental considerations – the most ambitious trade and environment chapter and the highest level of commitment that China has agreed in any FTA, says Minister for Trade and Export Growth, Damien O’Connor.
The upgrade will also mean that 99% of New Zealand’s nearly $3 billion wood and paper trade to China will have tariff-free access to China.
China is New Zealand’s largest trading partner, with two-way goods and services trade now exceeding $32 billion a year.