Timber crisis after China hit

Call for government assistance to stave off job losses and mill closures after Beijing banned logs from NSW and Western Australia.

Former trade minister Simon Birmingham this month launched formal World Trade Organisation action over an 80 per cent tariff China applied to $2.5bn of Australian barley. Picture: AAP

The nation’s timber industry says it will need government assistance to stave off job losses and mill closures if Chinese trade sanctions continue, after Beijing banned logs from NSW and Western Australia claiming it had found “live forest pests” in earlier shipments.

In the latest blow for Australian exporters, China effectively ended the timber trade between the two countries when it banned imports from those states, two days before Christmas.

Australian timber from Queensland, Victoria, South Australia and Tasmania was banned earlier this year amid serious trade tensions between Canberra and Beijing, which now has restrictions on wine, barley, beef, lobsters and coal.

An Australian Forest Products Association spokesman said the industry group had already implemented a comprehensive package of reforms to address China’s phytosanitary concerns.

“AFPA is in ongoing discussions with Australian governments on the significant impact the suspension of the log trade is having across the forest industries supply chain,” he said.

“Should the situation continue into 2021, the need for short and long-term assistance to support workers and businesses already impacted, and to avoid further, widespread job losses and mill closures.”

Australia exports $1.6bn of logs and wood chips to China each year.

Former trade minister Simon Birmingham this month launched formal World Trade Organisation action over an 80 per cent tariff China applied to $2.5bn of Australian barley.

China has slapped bans on more than $20bn worth of Australian exports this year, including choking off thermal coal despite winter energy shortages for its people.

On Friday, the South China Morning Post reported almost 9000kg of craft beer exported from Sydney had been stopped at the port city of Xiamen, in southeastern China, because it was incorrectly labelled.

The General Administration of Customs of China extended the ban on Australian timber on Wednesday in line with its sanitary measures and quarantine laws, the agency said.

“Recently, customs in Tianjin, Nanjing, Xiamen, Guangzhou, Shenzhen and Huangpu discovered live forest pests in logs imported from NSW and Western Australia,” the notice said.

“In order to prevent the introduction of harmful organisms and protect our country’s agricultural and forestry production and ecological safety, we have hereby decided to suspend log imports from Australia’s NSW and WA states.”

Agriculture Minister David Littleproud said the government was committed to working with all industries hit by recent trade disruptions including the suspension of log exports to China.

Agriculture Minister David Littleproud said the government was committed to working with all industries hit by recent trade disruptions including the suspension of log exports to China. Picture: Sean Davey

Mr Littleproud said the government had already provided $72.7m to farmers and forestry exporters in a bid to assist them expand the markets they sold to next year.

The timber bans started on October 31 when Chinese customs officials claimed they had found the bark beetle in logs from Queensland. Victorian, South Australian and Tasmanian logs were banned soon after on the same grounds.

Senator Birmingham, who was succeeded in the trade portfolio by Dan Tehan in a pre-Christmas reshuffle, accused Beijing of undermining the “letter and spirit” of the China-­Australia free-trade agreement and its obligations under World Trade Organisation rules.

Beijing has laid the blame for the increasingly toxic bilateral relationship with Australia, setting out 14 grievances with Canberra including the ban on Huawei from Australia‘s 5G network, new foreign interference laws, and a push for an inquiry into the origins of COVID-19.

It is also angry at forthright comments by Australian leaders about the South China Sea and China’s detention of Uighurs in Xinjiang, and “thinly veiled” allegations of cyber intrusions by Chinese hackers.

Australian Bureau of Statistics figures released last Wednesday show the trade surplus for goods fell to a two-year low in November hit by a slump in exports to China. It showed a $1.2bn decrease in exports to China, pushing the trade surplus to just $1.9bn compared with $4.7bn in October.