Trade is the life force of New Zealand
The Minister and Ministry of Foreign Affairs and Trade are currently holding public meetings around New Zealand, explaining our trade agenda through the Government’s recently released Trade Agenda 2030: securing our place in the world. This is a great initiative, designed to explain to New Zealanders the importance of trade, and what the Government is doing to make sure our country gets the best results from trade. In 1995 New Zealand exports were worth $29 billion; in 2016 they were worth $70 billion, 60% of which comes from the primary sector. This is a massive increase, with horticultural exports over the last two years having grown by almost 40%.
Because New Zealand is a small country with a small population, we need to export a lot of what we grow to maintain our financial security as a country; up to 95% of what New Zealand produces is exported. Access to our off-shore markets, tariff reduction, and removal of other non-tariff barriers will greatly increase the wealth of New Zealand, and these are the focal points of Trade Agenda 2030.
The Government’s trade agenda will benefit the exports of fresh fruit and vegetables, with free trade agreements being reached with some of our key trading partners: Japan, the European Union, and the United Kingdom. These FTAs will see tariff reduction, which in the case of Japan is worth $26 million a year for fruit alone. But tariff reductions are just the start; free trade agreements open the door to export opportunities and improving access to the country’s markets. They’re enabling dialogue.
It is not just tariffs that cost exporters money; there are a number of non-tariff barriers that restrict access and have high compliance costs, reducing the return to the Kiwi exporter. These non-tariff barriers include product standards, labelling requirements, and certification requirements, with one of the key issues facing fruit and vegetables being the insurance of produce being free of pests and disease not found in the country being exported to. Barriers occur when these requirements and exclusions go beyond what is reasonable and supported by scientific evidence, for example outlawing a pest on imported fruit that is already in the country the fruit is being exported to. FTAs facilitate discussions to resolve these issues, and it is pleasing to note that a key component of the Trade Agenda is directed at resolving these unnecessary barriers.
Trade is hugely important to the financial well-being of New Zealand. The Government’s Trade Agenda is a very positive step to improve New Zealand’s ability to trade. By seeking to explain how important it and trade in general is to the general public will strengthen the Government’s ability to deliver on the Trade Agenda so that, by 2030, 90% of our exports are covered by free trade agreements.
Achieving this target will significantly enable New Zealand trade and, in turn, prosperity.
- Mike Chapman, CEO