Catherine Beard looks ahead to New Zealand’s new emerging export landscape. Post-Covid there is much for exporters to be excited about.
The export game was rocked when New Zealand closed its borders more than two years ago. Since then we’ve had to adapt to new ways of working, while coming to terms with a new normal.
But recent shifts in New Zealand’s Omicron response reveal there is light at the end of the tunnel. Exporters can finally expect a return to some normalcy, while new and potentially game-changing opportunities have emerged post-Covid.
Signs of recovery
Managed Isolation and Quarantine (MIQ) for inbound travellers has been a crucial component to how well New Zealand has handled Covid-19. For business travel, these requirements were stifling. While restrictions made sense when markets around the world were in a similar position, that is no longer the case – and hasn’t been for some time. The world is getting back to doing business face-to-face, and the continued hamstringing of our exporters with isolation requirements has taken a toll.
The Government recently eased border restrictions, allowing vaccinated Australian travellers to come to New Zealand with no requirement to isolate. In a matter of weeks the rest of the world was able to follow. Allowing more tourists to return to New Zealand freely will allow airlines to plan for re-entry into the New Zealand market and eventually get air cargo rates back to pre-Covid levels – in terms of both cost and capacity as traveller numbers increase.
In terms of exports themselves, physical goods from New Zealand being transported via ship, especially large volume commodity products, continued to trade well even though it was difficult. However, NZTE tells us many of our services and digital exporters have been suffering due to the inability to travel and get in front of existing and new customers.
Businesses are once again able to plan ahead, reconnect and make new connections with others around the world without worrying about being able to return to New Zealand with ease.
Forging new connections
As part of the Government’s reconnecting New Zealand scheme, the Prime Minister announced they would be leading trade delegations starting with our third highest trading partner, the United States, in May. The visit will focus on “high-tech” exports – New Zealand has plenty to offer in this space. Other delegations on the agenda include Australia, Asia and Europe. These parts of the world have the capital and the customers, and New Zealand has the IP. Bringing these together means innovative Kiwi exports are boosted by international-scale investment.
We’re also seeing increased access to existing markets post-Covid. A new Free Trade Agreement between New Zealand and the United Kingdom is expected to be in force by the end of the year. This agreement will remove almost all tariffs on our exports to the UK and we expect exports to increase by more than 50 percent as a result. We also expect the agreements will increase New Zealand’s GDP by up to $1 billion.
Our half-billion-dollar wine exports will be worth significantly more too. Dairy and meat exports will be free from tariffs for the first time in 50 years and our exporters will find it easier to do business in the UK under new rules for movement of business people.
We have a long history of trade dealings with the UK, and have faced stiff tariffs on key exports since the UK joined the European Economic Community. Having that tariff burden finally lifted is historic news.
The UK is a wealthy and sophisticated market looking for quality products, and that’s what we do. This agreement and any like it will allow our exports to remain competitive around the world.
Cause for optimism
2022 won’t be a walk in the park for exporters, particularly on the supply chain front, but there is still plenty to be optimistic about. This pandemic has forced us to innovate, so that we should be ‘ready to go’ once border restrictions have eased. That time is nigh, and we’re poised to take full advantage when we reconnect with the rest of the world.
Catherine Beard is ExportNZ’s director of advocacy.
