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12 Feb 2024

New Zealand ironing out trade wrinkles over timber exports

5:23 pm on 12 February 2024
National's Todd McClay arrives at Wellington Airport on 16 October 2023 following the election at the weekend.

Trade minister Todd McClay. Photo: RNZ / Angus Dreaver

Trade minister Todd McClay last week said New Zealand and India were working together to improve trade and address market access issues for timber exports to the South Asian nation.

Easing access for timber exports to India was a key talking point on McClay's pre-Christmas trip to India, during which he spoke with India's minister of commerce and industry, Piyush Goyal, in New Delhi.

Timber exports to India

In a 20 December statement following Todd's visit, the Indian government acknowledged the joint need to streamline trade processes, reduce barriers and promote a conducive business environment.

"The trade minister of New Zealand appreciated the efforts made by India to sort out the issue related to [the] export of wooden logs to India," the statement said.

McClay detailed the steps both countries had taken to resolve the issue so far.

"The New Zealand Environmental Protection Authority prohibited ship hold methyl bromide fumigation of logs for export, which took effect on 1 January 2023. This was the fumigation method used for log exports from New Zealand to India," McClay said.

"Biosecurity New Zealand worked with India on an interim phytosanitary option for log exports from New Zealand, which allows fumigation on arrival into India. This ensures trade can continue while New Zealand and India work on other treatment options."

WTO cooperation

The Indian government said the two ministers also discussed the World Trade Organisation Ministerial Conference (MC) in Abu Dhabi later this month.

"The two sides assured each other of cooperation and mutual understanding for a positive approach to reach a decision on the long-standing issue of public stock holding (PSH) during MC13," the Indian government statement said.

Confirming the discussion, McClay outlined New Zealand's position.

"In my role as a vice-chair (of the Ministerial Conference), I will engage with other WTO members to work for a meaningful outcome on agriculture from MC13, including measures which help to promote global food security," McClay said.

At the Ministerial Conference in Bali in 2013, WTO members agreed that negotiations should be held on revised WTO rules covering the government procurement of staple food items for the purposes of public stock holding for food security purposes.

"New Zealand agrees that this issue needs to be addressed as part of the outcome from WTO MC13. Our long-term goal is to secure agreement on strengthened WTO rules to limit trade and production-distorting, and environmentally harmful, agricultural subsidies," McClay said.

"PSH measures can be designed and implemented in ways that do not distort trade and production. Revised rules on PSH must be formulated as part of a broader, holistic approach to strengthen the rules on agricultural subsidies in general. Addressing PSH in isolation would not meet New Zealand's level of ambition."

Other areas of mutual interest

McClay and Goyal also discussed cooperation opportunities to lift bilateral economic relations, particularly in sectors such as education, investment, agriculture and tourism.

They acknowledged the improvement in business engagement between the two countries, noting that it could provide the necessary impetus for regular government-to-government dialogue.

"The importance of the annual meeting of the Joint Trade Committee established under the 1986 India-New Zealand Trade Agreement, and regular engagement at a senior level was also acknowledged," the statement from the Indian government said.

India is currently New Zealand's 19th-largest export market, accounting for 1 percent of all exports shipped abroad.

New Zealand provides just 0.1 percent of India's import market and is ranked 75th on the list of the South Asian nation's trade partners.

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