Australia has refused to commit to EUDR compliance under a landmark free trade agreement that also scrapped the 5 per cent tariff on European cross-laminated timber and glulam imports. Prime Minister Anthony Albanese and European Commission President Ursula von der Leyen signed the deal at Parliament House in Canberra this morning, concluding eight years of negotiations.
As it stands, Europe is the undisputed leader in cross-laminated timber and glulam, with huge volumes of Austrian, German and Italian-sourced wood arriving at port and being used in Perth’s Boola Katatjin building, the Sydney Fish Markets, the Adelaide Aquatic Centre, and, most recently, the Atlassian Central Tower.
However, in recent years, Australian manufacturers have sought to establish a firm foothold in the local market by using Australian-grown, Australian-made timber, following major investments in NeXTimber by Timberlink (Australia’s only cross-laminated timber and glulam plant), Xlam, Hyne Timber, Australian Sustainable Hardwoods, and Wesbeam.
Trade Minister Don Farrell, who signed alongside Albanese and von der Leyen, framed the agreement as a hard-won commercial breakthrough. “This is a strategically important and economically valuable agreement at a time when Australian exporters are navigating choppy trade waters,” he said. Albanese was equally direct. “I am proud that we have been able to secure this deal, which will deliver benefits for both Australia and the European Union for generations to come,” the Prime Minister said.
Speaking about the agreement today, the Australian Forest Products Association — the peak body for the country’s $23 billion forest products value chain — had one piece of good news for the sector. AFPA Chief Executive Diana Hallam welcomed the EUDR carve-out. “Fortunately, in a win for the sector, the A-EU FTA does not include deforestation regulation, and we will continue to engage with the EU on these problematic and trade-distorting measures in other international forums alongside the United States, Canada and New Zealand,” she said.
But the tariff removal was a matter entirely different.
Hallam said scrapping the 5 per cent duty handed import competitors an additional price advantage at exactly the wrong moment, with domestic producers already facing surging imports, a stagnant housing market, and rising costs across energy, insurance, labour, transport and fuel. “This trade deal will further undermine the competitiveness of Australian timber,” she said.
She also flagged a structural inequity that the agreement does nothing to address — local timber manufacturers remain the only major primary industry without Federal Government support for country of origin labelling. “We are disappointed that adding further price advantage to imports into our timber market, while the government is adding costs to domestic production, will be highly detrimental to local timber manufacturing,” she said.
Where does this leave Australia’s $300m Timber Fibre Strategy?
The signing also cuts directly across the Albanese government’s $300 million Timber Fibre Strategy — which, as Wood Central reported when it was released, was built on the explicit assumption that Australia would need to manufacture more higher-value wood products using its own fibre.
“The supply of mass timber products from overseas is forecast to be constrained due to competing demand and reduced global supply of fibre,” the strategy stated, signed off by Agriculture, Fisheries and Forestry Minister Julie Collins. “If the Australian building and construction sector is to use more mass timber, it will need to be manufactured here,” it said.
Over the past 12 to 18 months, several projects funded through the Commonwealth-supported Australian Forest and Wood Innovations program have focused on opening new domestic markets for locally manufactured glulam and CLT — including the Modernising Timber Windows initiative, which is trialling new glulam alternatives, among them Australian Sustainable Hardwoods’ MASSLAM, across the country’s 200-strong timber window supply chain. Whether those efforts can offset a structural tariff advantage now conferred on European competitors remains an open question.
