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China FTA upgrade to see tariffs come off wood and paper exports

Tairawhiti's forestry industry is welcoming an upgrade to the New Zealand-China Free Trade Agreement.

The upgrade comes into force on April 7, Minister for Trade and Export Growth Damien O'Connor confirmed last month after New Zealand and China ratified the upgrade protocol and agreed the start date — the final step following the signing of the FTA upgrade in January 2021.

“The upgrade also includes new market access commitments in goods and services, and additional trade facilitation measures,” said Mr O'Connor.

“In terms of goods, the upgrade will deliver further market access improvements, resulting in tariff-free access for 99 percent of New Zealand's $4 billion wood and paper trade to China, once fully implemented. Our existing FTA will also be augmented by new chapters in e-commerce, competition policy, government procurement and the environment.”

Eastland Wood Council chief executive Philip Hope said members were supportive of any Free Trade Agreement, “especially one that phases out tariffs on processed wood exports to China”.

“An upgrade on the Free Trade Agreement, with mutually agreed rules, provides more surety to our industry and enables our sector to consolidate its position.

“Production forestry provides important economic and social benefits for our region and is an efficient means of sequestering carbon.

“The log trade agreement is important for both countries and vital for Te Tairawhiti.”

A spokesman for the Ministry of Foreign Affairs and Trade said China had agreed to eliminate customs duties on 12 additional tariff lines of wood and paper products previously excluded from tariff elimination commitments under the existing FTA.

“These commitments will be phased in through a process of tariff cuts over a 10-year implementation period. This will result in significant duty savings for New Zealand exports and, once implemented, it means that 99 percent of our wood and paper trade to China will receive tariff-free access.

“In addition, a side letter was negotiated which provides a new process for implementing a commitment made in the existing FTA that, should China grant any third party more favourable treatment in the future on wood and paper tariff lines, then this treatment would be extended to New Zealand.

“Under the protocol, the FTA Joint Commission will have a new oversight role in confirming and recording New Zealand wood and paper products benefiting from these existing commitments.

“The new process will provide better transparency of China's implementation of its obligation to extend to New Zealand any future tariff cuts agreed with other countries, and ensure up-to-date information on tariff treatment for New Zealand wood and paper exports to China.”