WTO and APEC
With World Trade Organization (WTO) negotiations unable to accomplish all that New Zealand sought in international agricultural trade, regional and bilateral deals (agreements between two countries) were explored as well.
Asia–Pacific Economic Cooperation (APEC), a forum for Pacific Rim economies to discuss trade and economy in the region, first met in 1989. Through the 1990s there was an expectation that the association might foster mutual trade liberalisation. However, by the early 2000s this had not happened.
The rise of East Asia
The biggest change in New Zealand’s trading patterns in the 1990s and 2000s was the increased significance of China. China’s participation in world trade grew after it embarked on economic liberalisation in 1978.
In 1988 China took 4% of New Zealand’s exports, and was the source of 1% of imports. In 2007 it was the destination for 5% of exports and the source of 13% of imports. Including Taiwan and Hong Kong, these figures were 9% and 16% respectively.
The other significant new trading partner was South Korea, which took 4% of New Zealand’s exports in 2007, and was the source of 3% of imports.
Bilateral free trade agreements
New Zealand has concentrated on bilateral agreements with individual APEC economies. Such agreements were achieved with Singapore (2001), Thailand (2005), and, most significantly, with China (2008). In the early 2000s New Zealand was seeking a trade deal with the US. These agreements were not without controversy. Some activists drew other issues, including human rights, into the debate, particularly in relation to countries such as China.
In 2005 an agreement between Brunei, New Zealand, Chile and Singapore was signed, focusing on freer trade between these countries. There have also been attempts to develop regional trading agreements, such as linking the free-trade group Association of South East Asian Nations (ASEAN) with Closer Economic Relations (CER), Australia and New Zealand’s free trade agreement.
CER in the 2000s
Under the CER agreement (1983), Australia became New Zealand’s biggest trading partner, a status it had last held in the 1860s. In the early 2000s New Zealand was keen to increase the coverage of the agreement into the services area – for example insurance and investment. However, Australia’s priorities were negotiating agreements with Asian and North American economies. In 2003 net benefit from further integration with the Australian economy was estimated at between NZ$192 and $448 million each year.
New Zealand’s place in world trade
In 2007 New Zealand’s share of world trade was 0.21%. In 1950 the figure was 1%. Interpreting this as a decline would be misleading, as there was much less world trade in the 1950s, and New Zealand’s economy was still heavily export-oriented in the 2000s. With such a small proportion of world trade, New Zealand’s bargaining power was limited, and international trade policy agendas were set by others.
By the 1990s no single nation dominated New Zealand’s export statistics. The country has diversified, but in the early 2000s New Zealand’s main exports were still commodities such as meat and dairy products. Prices for such commodities are set by international markets, not producers.
Trade policy in the 2000s
In the 1990s and 2000s New Zealand was one of the freest traders in the world. Its trade policy in the 2000s was to keep all options open and negotiate with countries individually or in groups with the aims of gaining market access and fewer trade barriers.