"We have yet to see the detail, but we understand that all tariffs on logs and wood products will be reduced to zero. That represents a NZ$9m saving," says the Wood Council of New Zealand chair Bill McCallum. "While this is not a huge sum in the context of a trade worth NZ$1.5bn, we anticipate there will be bigger prizes arising from the TPP Agreement," he added.
The Wood Council of New Zealand (Wood Council) is a pan-industry body which represents the common interests of the forestry and wood processing sectors.
"The focus of the TPPA has been on tariff reduction and elimination, but with wood products we suspect that non-tariff barriers are a much greater impediment to trade. Technical barriers that have no scientific justification can prevent the import or use of imported wood products. Subsidies enjoyed by domestic wood processors can also make it impossible for imports to compete fairly," said McCallum.
"The TPP creates a special relationship among the participating countries and we are hopeful it will become a permanent forum where other impediments to free trade, such as non-tariff barriers can be overcome."
The Wood Council recently initiated a research project for a better understanding of these barriers in each potential market.
Another positive the council draws from the TPPA is the potential it creates for exporters of NZ processed wood products to compete in markets where they have until now been excluded by tariffs that escalate rapidly as value is added to a raw material.
"These lost opportunities are not included in the NZ$9m savings, because current tariffs make exports unprofitable," says Mr McCallum.
"The Wood Council appreciates the hard work of NZ Government negotiators at the TPP talks. Once the agreement is ratified and becomes law there will be immediate small benefits for the forest and wood processing sector. Longer-term we hope to see much bigger benefits," concluded Mr McCallum
