The recently signed China Australia Free Trade Agreement (ChAFTA), still to be progressed through the Australian Parliament, offers little for the wood products sector, reducing few of the important tariffs for Australian exports to China.
Imports to Australia, from China, are now tariff free, almost without exception. In exchange for free access to Australia’s market, China has granted Australian firms limited access to its markets, with few products enjoying entry into China on a tariff free basis.
In the case of wood product exports to Australia, there are essentially three groupings of tariff amendments (although the details are more extensive):
- Zero tariffs remaining in place
- Existing tariffs reducing to zero
- Existing tariffs remaining in place
Wood products that already enjoy a zero tariff when exported from Australia to China are raw resources such as woodchips and logs and products that have never been made in Australia (especially made from bamboo, unsurprisingly).
Wood products that will see reducing tariffs are included in the following table.
|Products||Current tariff||Final tariff||Number of Years|
|Hoopwood (split poles, piles, pickets, stakes etc)||8%||0||5|
|Coniferous plywood veneers||8%||0||5|
|Coniferous non-plywood veneers||4%||0||1|
|Meranti & tropical veneer||4% & 10%||0||2 & 5|
|Coniferous floorboards and parquetry pieces||7.5%||0||5|
|Bamboo and broadleaved (hardwood) floorboards and parquetry pieces||4||0||1|
|Bamboo and tropical plywood||12%, 10%, 8% & 4%||0||5|
|Wooden packing crates||7.5%||0||5|
|Casks and barrels (some)||16%||0||5|
|Builders joinery (eg. Doors and Windows)||4%||0||1|
The cynical would suggest that the Chinese are reducing tariffs on products that are not manufactured in Australia or intermediate products (veneers) that would allow Chinese manufacturers to make plywood instead of domestic manufacturers.
However, it is when examining the areas where no tariff change will occur that cynicism may be most appropriate. The table below details these. Australia produces particleboard and MDF (medium density fibreboard), plywood and panels. However, it has largely been frozen out of Asian markets, including those in China, for these elaborately transformed resources.
|Particleboard, OSB, MDF||4% & 7.5%|
|Broadleaved (hardwood) plywood||4% & 10%|
|Broadleaved (hardwood) handles and tools||16%|
|Broadleaved (hardwood) pallets||7.5%|
Imports of plywood to Australia, mainly but not only from China, have long been a source of complaint because of product regularly failing to meet Australian Standards, including those related to consumer and product safety. For further details on this, go to www.ewpaa.asn.au.
In simple summary, when it comes to wood products, Australia’s raw resources are welcome in China, but the country’s most elaborately transformed products are not. The ChAFTA seems to confirm this sentiment.
Further details are available at http://dfat.gov.au/trade/agreements/chafta/Pages/australia-china-fta.aspx.
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