Kiwi wool products taking flight.

Gretchen
,

This is your handy reference on the trade policy environment for wool exports.

Local brands are telling us more wool is being manufactured into products onshore – in both traditional and innovative products. Joy!

This handy “need-to-know” review of the market access landscape for wool products should make it easier for current and future brands and manufacturers to understand the challenges and opportunities involved in growing their markets off-shore:

  • Existing tariffs for current and future markets.
  • Current FTAs in force, agreed, and in negotiation.
  • The broader trade environment that has an impact (positive and negative) on New Zealand wool exports.

Sense Partners completed a report that shows that New Zealand punches above its weight in trade negotiations. We have secured free trade agreements with most of our major trading partners during a lengthy period of trade liberalisation. However, this is changing and the expectations are that we will see increased protectionist policies like tariffs and subsidies. At the same time, the projected increase in the volume of wool processed domestically will see our wool exports mix shift from fibre (greasy and clean wool) to more semi-processed and end-products.

Greasy and scoured wool fibre currently makes up most of New Zealand’s wool exports at around 80% by value. Unprocessed products like wool fibre generally attract low or no tariffs and more processed products tend to attract more. Wool is no different, with tariff escalation for more processed products like yarn and carpet.

We are currently benefiting from the FTAs in place and pending with the major export destinations for our wool exports, being:

  • China
  • United Kingdom
  • European Union (pending)
  • Australia

The major FTA outliers for our wool exports are India and the US, neither of which are likely to agree to an FTA soon.

As our exports move to more processed products, domestic manufacturers and brands will need to be aware of the tariff advantages that New Zealand’s FTA network can deliver to them and the cost implications of entering markets where there is no FTA and tariff barriers are in place. We also need to be aware of the broader trade environment and the impact that trade disputes between other countries have on us. A good example is the China-US trade tensions that impacted the production and export of textile products from China and reduced demand for wool.

The full report by Sense Partners is available to download here and a spreadsheet capturing the tariffs for current and emerging products and markets is available on request – please contact Ross McIsaac (ross@woolimpact.com) if you would like access to this or have any questions.

Useful links:

Ministry of Foreign Affairs and Trade

Ministry for Primary Industries

StatsNZ