International log war hurting New Zealand

New Zealand’s wood processors say the international log price war and protected overseas economies are crippling the New Zealand trade. The Wood Processors and Manufacturers Association told a meeting in Nelson that distortions in international trade were starting to make it difficult for local processors to be competitive globally. 

The industry worked to add value to New Zealand's raw timber and supported 25,000 jobs nationwide, but it was fighting to survive. The association's chief executive, Jon Tanner, said the global playing field was tilting less in New Zealand's favour. 

That was because international competitors were playing by a different set of rules. "And all this, we believe, is being caused primarily by subsidies that are being paid out across the world, and that are supporting the industries we are competing with," Mr Tanner said. 

"MFAT (Ministry of Foreign Affairs and Trade) likes to call them non-tariff barriers - let's just call them the covert world of subsidies because they're really, really, really hard to see." They were focused on finding ways to tackle the problem, but the elephant in the room was log supply and prices, he said. The global manipulation of pricing was hurting New Zealand processors and timber growers. 

The government recently commissioned an inquiry into the log market, which was looking into barriers to fairer international competition. Mr Tanner said it was a good start. 

“We’ve certainly made the case for the issue. What officials are doing now is drilling into what we can understand about the sector and what’s supporting it around the world because we really don’t - as a global industry, understand that.” 

The government was also working on securing a range of trade agreements, but warned it would not be a quick-fix. The Minister for Trade and for Export Growth, Damien O'Connor said agreements in principle with ASEAN member countries - from South East Asia - were expected to be in place by the end of the year. 

"We won't get all the things we want but if we can get in place rules of trade that all those countries have to adhere to, around e-commerce, around investment and around goods, then we'll be in a safer space," Mr O'Connor said. ​