NEW ZEALAND:
An Agricultural and Forestry Exporting Nation

New Zealand's small economy is heavily dependent on overseas trade. The country developed as Britain's "off-shore farm" and until the United Kingdom (UK) joined the European Economic Community in 1973, almost all New Zealand's exports, comprising mainly agricultural products, went to the UK. In the past 20 years, however, New Zealand has adapted to a changing world. The UK remains an important market, but it now shares that position with Australia, Japan, US, and Korea. New Zealand's agriculture and manufacturing industries have developed to suit the needs of diverse markets.

Agriculture and forestry produce the highest export receipts of any sector in the New Zealand economy. Agricultural exports accounted for about 47 percent (FOB) of export receipts in 2002, reaching almost $14.5 billion, while horticulture exports accounted for over 7 percent of export receipts, or $2.1 billion. In 2002 forestry exports accounted for 12 percent of export receipts earning $3.7 billion (FOB) in overseas funds. Together, agriculture, horticulture and forestry accounted for over 65 percent of the export receipts.

Sector Exports

Total receipts from the export of sheep and cattle meat and meat products reached $4.5 billion in the year to June 2002, or 14.5 percent of all goods exported from New Zealand. Wool and wool products fetched almost $1 billion that year, or 3.9 percent of exports. Dairy export receipts were $5.9 billion (18.9 percent), placing New Zealand second only to the EU in the international export of dairy products.

Farming Without Subsidies

Government assistance to agriculture in New Zealand is very low by international standards. New Zealand farmers have the OECD's lowest producer support rates. Such assistance as remains in New Zealand is directed at government-funded research, pest and disease control, agri-environmental measures and climatic disaster relief.

Producer Support Estimates (Percent All Products)

Producer Support Estimates (% All Products)
Calendar Year	Average	Average	Average	Average	1994	1996	1998	2000	2002
	1979-81	1986-1988	1990-92	1992-1994
Australia	8	9	11	10	10	6	7	5	5
Canada	20	34	42	31	26	15	17	19	20
European Union	36	40	47	48	49	39	39	34	36
Japan	60	61	68	74	75	63	62	60	59
New Zealand	18	11	4	3	3	1	1	1	1
United States	14	25	22	21	19	17	23	22	18
OECD Average	29	38	42	42	42	33	34	32	31
p: provisional figures

Source: OECD

The World Trade Organisation (WTO)

The World Trade Organisation (WTO) The World Trade Organisation succeeded the General Agreement on Tariffs and Trade (GATT) in 1995 following the Uruguay Round of trade negotiations. The WTO is the body in which its 146 member countries develop international trade rules and ensure compliance with them.

Throughout the Uruguay Round New Zealand worked hard to ensure that agricultural products were better covered by international trading rules. The WTO Agreement on Agriculture, which is a result of that negotiation, includes specific commitments to be undertaken by each WTO Member to reduce trade barriers maintained at countries' borders and to reduce domestic and export subsidy programmes. As a result of lower tariff barriers, increased quota access, and a cap and reduction on the use of export subsidies, the Uruguay Round resulted in significant trade benefits to New Zealand. It is estimated that by the end of the Uruguay Round's implementation period, 2004, New Zealand's agriculture sector (and the New Zealand economy as a whole) will have benefited by over $700 million per year from additional export revenue and lower tariffs paid. In reality this figure is likely to be an understatement because it excludes the benefits accruing from successful dispute settlement cases and other rules such as those relating to sanitary and phytosanitary measures.

WTO Building

Asia Pacific Economic Cooperation (APEC)

APEC logo The Asia Pacific Economic Cooperation (APEC) is a regional organisation set up in 1989 and now comprises 21 member economies around the Pacific rim. They are: Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, Chinese Taipei, Thailand, the United States and Vietnam. Over 70 percent of New Zealand's trade and investment is with other APEC economies. Among APEC's goals are to achieve free trade and open investment between its member economies. In 1994, APEC leaders adopted the Bogor Declaration establishing a commitment to free and open trade and investment in the region by no later than 2010 for developed economies, and 2020 for developing economies.

meeting

Australia-New Zealand Closer Economic Relations Trade Agreement (CER)

New Zealand Flag Australian Flag The 1983 CER agreement between New Zealand and Australia is the most comprehensive trade agreement entered into by either country, and among the most complete between any two countries in the world. The bilateral relationship is underpinned by free movement of people between the two countries, by regular contact at the political level, by close defence ties, and by a host of other agreements. Bilateral trade has grown significantly over the period of the agreement so that Australia is now New Zealand's largest single trading partner and our strongest trading relationship, while New Zealand has become Australia's fifth most important trading partner.