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James TURNER IUFRO Division 5 Conference 5.10.00 Forest Products Marketing & Business Management.

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Presentation on theme: "James TURNER IUFRO Division 5 Conference 5.10.00 Forest Products Marketing & Business Management."— Presentation transcript:

1 James TURNER IUFRO Division 5 Conference Forest Products Marketing & Business Management

2 Growing Wood Product Exports via Market Access: New Zealand Exports to USA, Japan and China James Turner, Frances Maplesden, Susan Bates and Andres Katz Scion, Trade and Economic Development Group, 49 Sala St, Rotorua, New Zealand

3 Aim of Work To understand potential changes in New Zealand’s value-added export market environment, the technical barriers and opportunities likely to arise, and the responses required to enable export growth

4 Overview  Background – Why?  Methods – How?  Results – What?  Conclusions – So what?

5 Background

6 Opportunity  Adding value & jobs – timber to carpentry

7 Adding value New Zealand primary and secondary wood product exports

8 Opportunity  Adding value & jobs – timber to carpentry  Growing opportunity

9 Growing Opportunity Global primary and secondary wood product trade

10 Opportunity  Adding value & jobs – timber to carpentry  Growing opportunity  Product differentiation ­Unrivalled brand, quality, service

11 Threat  Trade barriers ­Tariffs – tariff escalation

12 Wood Product Tariff Escalation Average Tariff (%) CountryRaw materials Semi- manufactured Finished products China Thailand Australia

13 Threat  Trade barriers ­Tariffs – tariff escalation ­Trade disputes – China bedroom furniture ­Non-tariff trade barriers

14 Non-tariff Barriers - Definition Government laws, regulations, policies and/ or practices which either protect domestically produced products from the full weight of foreign competition or which artificially stimulate exports of particular domestic products

15 Trade Barriers - Examples  Social & political ­Processing subsidies ­Quantity controls  Health & safety ­Phytosanitary regulations ­Restrictive testing and inspection  Environmental ­Harvest restrictions ­Certification

16 Research Questions  Are NTBs a significant barrier to New Zealand value-added exports?  What strategies can be used to overcome these barriers?

17 Methods

18 Value-added Markets  Builder’s carpentry & joinery ­Wooden doors  Mouldings & millwork  Wooden furniture  Prefabricated buildings  China  Japan  United States

19 Methods Exporter Survey Current barriers Costs Economic Impact Assessment Important barriers STEEP Future barriers Strategies

20 Exporter Survey  13 one-on-one interviews ­prefabricated houses ­wooden doors  Why not exporting?  Factors affecting export growth

21 STEEP Analysis  Social, technological, economic, environmental, political  Trends ­predetermined ­uncertainties  Expert workshops

22 STEEP Analysis  Determine future non-tariff barrier trends by ­Identifying important trends and drivers ­Assessing implications for trade barriers

23 Economic Impact Assessment  Global Forest Products Model  Non-tariff measures ­Subsidies – export & production ­Shipping costs ­Manufacturing costs  SPWP – imports & exports

24 Global Forest Products Model  Forecasts ­Prices ­Demand ­Supply ­Trade  Competitive equilibrium  18 wood products  180 countries linked by trade

25 Results

26 Exporter Survey Current barriers Costs Economic Impact Assessment Important barriers STEEP Future barriers Strategies

27 Survey – Prefab Houses  Japan – engineering certificates  China – lack of IP protection – lack of acceptance – treatment of radiata  USA – open & transparent  Management time costly ­> $1 million over 5 years ­small firm size ­market development

28 Survey – Doors  Japan – no significant barriers  USA – fire rating requirements  Lack of scale  Market development

29 Exporter Survey CountryProductNon-tariff barrierNTB Cost (%) NTB Cost (US$/ t) JapanPrefab housingEngineering certificate7.0 – Fire code3.0 – – 118 Design values Bureaucracy1.03 ChinaPrefab housingIP protection1.0 – – 47 Timber treatment1.535 USADoorsFire rating3.041

30 Results Exporter Survey Current barriers Costs Economic Impact Assessment Important barriers STEEP Future barriers Strategies

31 STEEP Analysis China:  Environmental degradation  regulations - recycling, energy, air quality  Water - reliance on imported land-intensive products  fewer barriers for forestry products  IP protection might be tightened  Biggest challenge - impending labour shortage  reduced protection  New Zealand has comfortable relationship with China  easier to negotiate trade deals

32 STEEP Analysis USA:  Democrats likely to be more protectionist  less likelihood of trade agreement with NZ  US lobby groups  countervailing duties - bedroom furniture

33 Results Exporter Survey Current barriers Costs Economic Impact Assessment Important barriers STEEP Future barriers Strategies

34 Economic Impact CountryProductNon-tariff barrierExport Change (US$ million) Total Export Change (%) JapanPrefab housingEng certificate90 – – 2.9 Fire code – 0.2 Design values Bureaucracy00.0 ChinaPrefab housingIP protection10.0 Timber treatment10.0 USADoorsFire rating130.1 JapanPrefab housingMarket dev N Prefab housingMD and NTBs

35 Economic Impact  Modest impact of current NTBs on value-added products ­small proportion of total exports ­small part of production costs  Combining market development and market access beneficial

36 Conclusions

37  Are NTBs significant barrier? NO and YES ­value-added exports small ­combined with market development barriers are significant  What strategies? ­clear market development strategy

38 Questions?


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