China’s Ambassador to Australia, Xiao Qian, announced the ban on Australian timber imports has ended during a press conference on Thursday, 18th of May 2023. The ban was implemented in 2020 due to quarantine risks. This recent decision is an encouraging sign of improving trade relations between the two countries following intense disputes.
Australia’s $1.6 billion annual timber trade with China had been at a standstill. Ambassador Xiao confirmed the lifting of the ban. He stated, “Yesterday, the Chinese Customs formally notified the Australian Minister of Agriculture that China will resume importing Australian timbers.”
The restrictions were lifted after Australia satisfied the quarantine conditions set by Chinese customs.
Mr. Xiao noted the promising direction of their negotiations, saying, “Both sides agreed to sit down and talk about their differences.” This statement comes just a month after Australia decided to suspend its World Trade Organization appeal against Chinese tariffs on Australian barley.
While China attributes the ban to regulatory measures, Australian officials consider it part of a broader economic retaliation by Beijing during their tumultuous relationship in 2020.
Nonetheless, Mr. Xiao tied the easing of trade restrictions to improving political relations, suggesting that as relations improve, Chinese citizens have more favourable attitudes towards Australian products.
The Australian response
The lifting of the ban was warmly received by stakeholders in the Australian timber industry. Joel Fitzgibbon, CEO of the Australian Forest Products Association (AFPA), expressed relief and gratitude.
“When the ban came into effect more than two years ago, it caused a great deal of upheaval and uncertainty for many timber exporters and the broader forest sector, and this resolution is welcomed,” Mr. Fitzgibbon said.
“AFPA and log exporters have worked closely with the Albanese government, especially Trade Minister Don Farrell, and the former Coalition government on this issue, and we thank them for their efforts helping to resolve the quarantine issues that China faced importing logs from Australia.”
In an article in the Financial Review, Port of Portland chief executive Greg Burgoyne said the port used to export 1 million tonnes of logs annually to China before the bans.
“We’re aiming to get back to that tonnage in the near future,” he said.
Trade Minister Don Farrell traveled to China last week to increase dialogue on ongoing trade disputes. While no significant breakthrough was achieved, both sides agreed to continue discussions.
Farrell welcomed lifting the timber import ban as a “great outcome for the Australian forestry sector.” He is optimistic about further resolutions to trade impediments and anticipates the full resumption of trade for all affected products soon.
Treasurer Jim Chalmers has welcomed China’s decision to lift import restrictions on Australian timber, stating that returning to normalised trading patterns is in the “interests of both countries”.
Speaking in Manila, Foreign Minister Penny Wong said she had been told of the decision by the Chinese government on Wednesday night.
“We have made clear that we hope that there is the removal of trade impediments that have been imposed in this relationship. We have clarified to China that we think it is in both countries’ interests for those trade impediments to be removed.”
It may take some time to reinstate trade
Agriculture and Forestry Minister Murray Watt welcomed the news as a ‘positive step forward’ and called the Chinese government to roll back sanctions across the full range of agricultural products.
However, Senator Watt warned that it could be some months before the trade is fully restored.
“We would expect in the next couple of months to see some real change and those imports starting to happen,” Senator Watt said on Friday.
“There’s a couple of other little quarantine things that have got to be resolved, but clearly this is really positive news for Australia’s timber industry that a really important export destination has reopened.”
Senator Watt said the industry had since found nw markets, but they weren’t large enough to fill the Chinese gap.
“Very often China is prepared to pay a premium for Australian products, including timber, so it would be fair to say we’ve lost in the hundreds of millions of dollars as a result,” he said.
Industry urges caution before reinstating trade
David Quill, leader of the South Australian Timber Processors Association, offered a pointed critique of China’s recent lifting of the ban on importing Australian timber logs.
“Any saw log exported would come at the expense of the future survival of that industry. China can go and get their wood from New Zealand…we didn’t plant these trees 50 years ago just to satisfy the Chinese market. Australia is not at all rich in terms of timber resources.”
Timber Queensland CEO Mick Stephens is supportive of the normalisation of trade but expressed concerns with native log exports from Queensland.
In an interview with Wood Central, Stephens said. “Prior to the trade sanctions, we had seen a marked rise in native log exports from Queensland to China together with concerns over the risk of non-compliance with environmental and forestry regulation.”
“In many cases there were opportunistic log export traders targeting farmers and landowners. We want to see more auditing and compliance enforcement for native log exports to ensure a level playing field with local sawmills and wood processors.”
“As part of strengthening Australia’s illegal logging laws, these laws should equally apply to native log exporters which is a loophole as they already apply for importers and local processors.”
Meanwhile, CEO of Forestry Australia, Jacquie Martin expresses guarded optimism about the lifted ban. She warns against complacency, emphasising Australia’s position as a net importer of forest products, which she considers unsustainable.
“This is not sustainable given the current housing crisis. We are, in effect, exporting our forest management challenges to other nations when we have highly skilled professionals and scientists who are more than capable of appropriately managing our resources…We look forward to working with government to make sure we are no longer dependent on timber imports.”
Victorian Forest Products Association CEO Deb Kerr said China was an “ideal” destination for Australian exports.
Victoria, which makes up roughly 40 per cent of Australian pine imports used for construction, was facing a timber shortage, but Ms Kerr said Australia could not process the volume of small, lower-quality logs that China could.
“The supply shortage, particularly in Victoria, is currently being met by imports, so ideally we want to close that by having our own sovereign capacity.”
“But at the moment, we can’t process the volume of small, lower-quality logs that China can.”
“Aspirationally that’s where we want to be, but we just don’t have the capacity right now. Increasing the plantation estate is crucial to meeting our current and future housing needs, but it takes 32 years to grow a tree.”
China has been pressing Australia to start talks about Beijing’s bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade group. Australia has resisted, insisting that China remove all the coercive trade barriers imposed in 2020 before such discussions begin.
