Sharechat Logo

China tariff cuts a 'foot in the door' for NZ paper, packaging

Tuesday 5th November 2019

Text too small?

A phased tariff reduction for a range of paper and packaging products is an extra “foot in the door” into the Chinese market for those products, the country’s wood processors say.

An upgrade to New Zealand’s free-trade agreement with China yesterday secured a wind-down in tariffs on about 15 products over 10 years. That will deliver a $2 million benefit by the 10th year on trade currently worth about $36 million annually, the Wood Processors and Manufacturers Association of New Zealand says.

While that may seem like a small gain, association chair Brian Stanley said the products had been excluded since the original FTA in 2008.

Signals from China earlier this year were that no new products would be added to the agreement in the latest upgrade talks, and he said Prime Minister Jacinda Ardern and Trade and Export Growth Minister David Parker were to be congratulated for getting them “on the table.”

“The government has actually achieved something we didn’t think was ever going to happen,” Stanley told BusinessDesk. “This is a foot in the door.”

China is New Zealand’s biggest export market, with two-way trade between the countries worth about $32 billion in the year ended June 30.

Wood products are New Zealand’s third-largest export commodity. Global sales were worth about $6.5 billion in the year ended Sept. 30, with logs and timber accounting for about $5.2 billion of that. Paper and paperboard exports were worth $498 million in the same period.

China is the biggest market for New Zealand logs and was already an important market for the country’s ply, fibreboard and wood pulp when the original free-trade deal was inked in 2008.

Most wood products didn’t face tariffs then. Of those that did, 48 have since benefited from reductions or their elimination to bring them into line with commitments China has made to other countries, government officials said yesterday.

While the WPMA is pleased by the latest gain, Stanley noted that non-tariff barriers remain an obstacle in many countries, including those New Zealand already has free-trade agreements with.

Manufacturing subsidies are a particular challenge, which in China can include support for everything from electricity to transportation and land purchases, but which can also be hard to prove, he said.


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

12th November 2019 Morning Report
MARKET CLOSE: NZ shares gain, retirement villages buoyed by Auckland housing market bounce
NZ dollar rises, shrugging off US-China trade war woes
Long-serving ACC investment chief calls it a day
Institutional investors continue to shun Fonterra
Card spending stalls; dearer petrol crowds out other goods
Abano directors cave to takeover by scheme of arrangement
Fletcher dismisses subcontractor claims as vague
11th November 2019 Morning Report
Odds favour a rate cut but it's a line ball call

IRG See IRG research reports