Prosser Richard: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeProsser Richard: Oral Questions — Questions to Ministers[Sitting date: 16 March 2016. Volume:712;Page:9799. Text is incorporated into the Bound Volume.]12.RICHARD PROSSER (NZ First) to the Minister of Trade: What trade benefits has the Government negotiated for New Zealand’s forestry industry?Hon STEVEN JOYCE (Minister for Economic Development) on behalf of theMinister of Trade: New Zealand’s forestry industry has benefited significantly under our free-trade agreements and I thank the member for his question. For example under the ASEAN-Australia-New Zealand Free Trade Agreement our forestry exports now have tariff-free access to the markets of Brunei Indonesia Malaysia Singapore and Thailand. Thanks to the New Zealand - China free-trade agreement 97 percent of our exports enter China tariff-free. At 1 January 2017 all of our exports will be tariff-free into the Philippines. Under the New Zealand - Korea free-trade agreement 90 percent of our forestry exports are now tariff-free with the remainder being scheduled to be eliminated within the next 10 years and through the Trans-Pacific Partnership (TPP) we have negotiated the elimination of all tariffs on New Zealand forestry and forestry products. This notably will include Japan New Zealand’s fourth-largest export market; the US our sixth-largest market; and Viet Nam our eleventh-largest market. The TPP would result in an estimated $11 million in annual tariff savings for the sector when it is fully implemented.Richard Prosser: Why after nearly 8 years in Government has it not got rid of the 17 percent value-added tax imposed by the Chinese Government on New Zealand sawn timber and value-added timber products under the China free-trade agreement?Hon STEVEN JOYCE: Every country reserves the right to put sales taxes VAT and GST on their products and that is not likely to change. The member would be very upset if for example one of our trade partners told us we had to take GST off one of their products that was sold in the country. So it is China’s right to do that and I understand that every imported product going into China is subject to the same VAT.Richard Prosser: Will he ensure that the renegotiated free-trade agreement with China supports New Zealand’s regional timber processes by removing China’s 17 percent VAT on our manufactured wood products; if not will his Government ask the World Trade Organization to challenge China on its use of many non-tariff barriers which include building codes that do not allow Pinus radiata?Hon STEVEN JOYCE: The member asks a number of questions there. Firstly in relation to VAT I have already answered that in answer to a previous supplementary question. It is not something that New Zealand can demand of our trade partners in terms of their taxation systems. But in relation to non-tariff barriers the member raises a reasonable point. The Wood Council as we know has put out a report today which officials are already looking into in terms of the things that can be achieved there. But it probably does not need to be done under the free-trade agreement upgrade. There are ways of resolving the non-tariff barrier issues in individual industries.Dr David Clark: Why is the Government sitting on its hands?Hon STEVEN JOYCE: The member is simply wrong and he is continuing to be the worst Opposition MP in 50 years.Dr David Clark: What is the Government doing?Hon STEVEN JOYCE: The non-tariff barriers work that the Government is doing is actually comprehensive. Dr Clark needs to find a job.Richard Prosser: Given that China’s imports of softwood logs fell by 16 percent by volume and 20 percent by value in 2014-15 is he concerned that the bulk log trade may be at risk of a dairy commodity - style price correction?Hon STEVEN JOYCE: I am not sure the member’s figures are exactly correct. The most current figures suggest as I recall—I am doing this from memory—that those numbers of exports from New Zealand are up. But every commodity has risk attached to the cycle; it does not matter which commodity we are talking about. But I am confident that industries are actually able to manage those risks and in the case of the forestry industry the member will be pleased to know that the level of processed timber that goes offshore through the New Zealand export sector is actually as high as or in fact slightly higher than it was 7 or 8 years ago.Richard Prosser: Does his Government understand that supporting timber processing in the regions not only creates jobs for New Zealanders but also provides New Zealand with higher-value products to export and trade and therefore increased export receipts higher per capita GDP and an improved balance of payments; if so why is he not doing it?Hon STEVEN JOYCE: The Government agrees that processing is good and I would note for the member a number of investments that have made in recent times that indicate the settings are positive. For example in Taupō Pacific T&R is building a new high-tech processing plant; in Rotorua Red Stag Timber is constructing a new super-mill there which is to be the largest in the southern hemisphere and the first-stage investment is $60 million; Lumbercube has invested tens of millions of dollars in a world-first square log processing plant in Rotorua; and recently the Pan Pac Forests Products owner Oij from Japan has made a very big vote of confidence in the New Zealand processing industry by buying the Carter Holt Harvey processing assets and it has significant plans to further invest in processing in this country through those plants. So for the member’s benefit the settings are delivering continued investment in forestry processing in New Zealand.