Sign of breakthrough in China wool quota

By PHILIPPA STEVENSON

The wool industry may have the first sign from China that talks between officials in Beijing last month have eased the quota crisis stifling exports to New Zealand's major market.

A spokesman for Wool Group, Roger Buchanan, said Beijing marketing staff believed that some Chinese bureaucrats were ready to release quota.

He said it was the first light in a debacle which this year cut New Zealand wool exports to China by 38 per cent, and followed falls in the two previous years.

Mr Buchanan, a member of a delegation to China led by the Deputy Secretary for Foreign Affairs and Trade, John Wood, said assurances given by the Chinese in October could not have been stronger, nor more encouraging.

His confidence had grown further after China and the US signed an agreement on China's accession to the World Trade Organisation.

"Membership of the WTO will impose disciplines on their trading practices which will overcome many of the difficulties we have been experiencing in the last year," Mr Buchanan said.

However, he remained wary.

"I've just learned with China to be cautious and not count our chickens too quickly."

He said quota agreed between the New Zealand and Chinese governments two years ago was more than enough for the trade but administrative problems had arisen.

Chinese officials decided to split quota, readily allocating it for wool for processing and re-export, but restricting it for wool for domestic consumption which involved the majority of New Zealand's interests.