james turner iufro division 5 conference 5.10.00 forest products marketing & business management
TRANSCRIPT
James TURNER
IUFRO Division 5 Conference5.10.00 Forest Products Marketing & Business
Management
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
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
Overview
Background – Why? Methods – How? Results – What? Conclusions – So what?
Background
Opportunity
Adding value & jobs – timber to carpentry
Adding value
.0
.5
1.0
1.5
2.0
2.5
1990 1992 1994 1996 1998 2000 2002 2004 2006
Exp
ort
Val
ue
(US
$ m
illi
on
) Primary products
Secondary processed
New Zealand primary and secondary wood product exports
Opportunity
Adding value & jobs – timber to carpentry Growing opportunity
Growing Opportunity
Global primary and secondary wood product trade
20
40
60
80
100
120
140
160
1960 1970 1980 1990 2000 2010
Tra
de
valu
e (U
S$
bill
ion
)
Primary wood productsSecondary processed wood products
Opportunity
Adding value & jobs – timber to carpentry Growing opportunity Product differentiation
Unrivalled brand, quality, service
Threat
Trade barriers Tariffs – tariff escalation
Wood Product Tariff Escalation
Average Tariff (%)
Country Raw materials
Semi-
manufactured
Finished products
China 1.11 4.05 5.07
Thailand 2.80 11.51 20.71
Australia 2.68 3.91 4.00
Threat
Trade barriers Tariffs – tariff escalation
Trade disputes – China bedroom furniture
Non-tariff trade barriers
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
Trade Barriers - Examples
Social & political Processing subsidies Quantity controls
Health & safety Phytosanitary regulations Restrictive testing and inspection
Environmental Harvest restrictions Certification
Research Questions
Are NTBs a significant barrier to New Zealand value-added exports?
What strategies can be used to overcome these barriers?
Methods
Value-added Markets
Builder’s carpentry & joinery
Wooden doors Mouldings & millwork Wooden furniture Prefabricated buildings
China Japan United States
Methods
Exporter Survey
Current barriers Costs
Economic Impact Assessment
Important barriers
STEEP
Future barriers
Strategies
Exporter Survey
13 one-on-one interviews prefabricated houses
wooden doors
Why not exporting? Factors affecting export growth
STEEP Analysis
Social, technological, economic, environmental, political
Trends predetermined
uncertainties
Expert workshops
STEEP Analysis
Determine future non-tariff barrier trends
by Identifying important trends and drivers
Assessing implications for trade barriers
Economic Impact Assessment
Global Forest Products Model Non-tariff measures
Subsidies – export & production
Shipping costs
Manufacturing costs
SPWP – imports & exports
Global Forest Products Model
Forecasts Prices
Demand
Supply
Trade
Competitive equilibrium 18 wood products 180 countries linked by trade
Results
Results
Exporter Survey
Current barriers Costs
Economic Impact Assessment
Important barriers
STEEP
Future barriers
Strategies
Survey – Prefab Houses
Japan – engineering certificates
China – lack of IP protection
– lack of acceptance
– treatment of radiata
USA – open & transparent
Management time costly > $1 million over 5 years
small firm size
market development
Survey – Doors
Japan – no significant barriers
USA – fire rating requirements
Lack of scale Market development
Exporter Survey
Country Product Non-tariff barrier NTB Cost (%)
NTB Cost (US$/ t)
Japan Prefab housing Engineering certificate
7.0 – 13.0 165 - 307
Fire code 3.0 – 5.0 71 – 118
Design values 20.0 473
Bureaucracy 1.0 3
China Prefab housing IP protection 1.0 – 2.0 24 – 47
Timber treatment 1.5 35
USA Doors Fire rating 3.0 41
Results
Exporter Survey
Current barriers Costs
Economic Impact Assessment
Important barriers
STEEP
Future barriers
Strategies
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
STEEP Analysis
USA: Democrats likely to be more protectionist
less likelihood of trade agreement with NZ
US lobby groups
countervailing duties - bedroom furniture
Results
Exporter Survey
Current barriers Costs
Economic Impact Assessment
Important barriers
STEEP
Future barriers
Strategies
Economic Impact
Country Product Non-tariff barrier Export Change
(US$ million)
Total Export Change (%)
Japan Prefab housing Eng certificate 90 – 177 1.4 – 2.9
Fire code 15 - 47 0.0 – 0.2
Design values 326 5.5
Bureaucracy 0 0.0
China Prefab housing IP protection 1 0.0
Timber treatment
1 0.0
USA Doors Fire rating 13 0.1
Japan Prefab housing Market devN 129 0.2
Prefab housing MD and NTBs 730 12.6
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
Conclusions
Conclusions
Are NTBs significant barrier? NO and YES value-added exports small
combined with market development barriers are significant
What strategies? clear market development strategy
Questions?