COLUMN | Exporting is an important part of the business of many NZFGC members whose brands we see daily on supermarket shelves.
For some, exporting outweighs what they sell on our shores, while others are looking to break into new markets to open up growth opportunities beyond what can be offered domestically. When I’m overseas, and I see products from Aotearoa, New Zealand, in supermarkets, or our wines on a wine list, it gives me a rush of pride.
Though exporting is good for the companies involved. and can make us feel good about performing above the expectations of a small nation at the bottom of the world, we all need to be aware our prosperity depends on trade. Ministers of Trade, government officials and organisations such as Trade Works and the New Zealand International Business Forum work hard to expand opportunities and improve conditions for our companies in overseas markets.
According to the Ministry of Foreign Affairs and Trade, trade is critical to our economy. We can pay for the goods and services we import from overseas only by selling to other countries. At the moment, international trade (exports and imports) makes up a whopping 60 percent of New Zealand’s total economic activity.
Goods exports grew 13 percent to $72.0 billion for the year ending December 2022, while goods imports grew 21 percent to $80.1 billion.
Supporting open markets through free trade agreements is a logical response to the nature of our economy. Our relatively small scale and population of only 5.1 million people means we simply can’t produce at affordable prices the diverse, high-quality goods we import. We are also in a fortunate position as a country where we can produce much more volume than our small domestic market can sustain. The number of jobs New Zealanders are in either directly in export sectors or in supporting sectors amounts to around 600,000. Many of these are in the regions, supporting local economies. For many members of NZFGC, overseas markets provide an opportunity for their businesses to grow to a scale that simply could not happen in New Zealand alone.
Free trade doesn’t benefit just our exporters. Our open economy has meant our importers and consumers now enjoy access to a much wider and more competitively priced range of goods and services. Without imports, New Zealanders would not have access to anything containing a computer chip – such as mobile phones, computers, and smart televisions. The competition provided by imports contributes to a wider range of quality products at internationally competitive prices than would be possible if we could buy only from ourselves. While we support further reform of the grocery sector to enhance competition for consumers and provide suppliers greater confidence, imports are a critical factor in our domestic market operating well.
This year we’ve seen progress in trade agreements, with a UK free trade agreement, and as recently as 11 August, New Zealand and Australia signed a Sustainable and Inclusive Trade Declaration. This year we also mark 40 years of Closer Economic Relations with Australia. Last year, Australia represented 15% of our total exports and $29 billion in two-way trade.
The Declaration builds on the success of CER. It amplifies the commitment to a rules-based international trading system, the advancement of a net-zero transition, and the delivery of sustainable development for our communities, including ensuring that the rights and economic interests of indigenous peoples are reinforced and not undermined by international trade and investment policy and activities.
So, we should value the work of many of our favourite local companies making it big on the international stage, and be grateful for the range of goods importing provides us and those working hard to facilitate trade.