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While Covid-19 may have put a significant dent in New Zealand’s trade with the United States in recent times, the overall relationship has matured and broadened in value and opportunity over the past 15 years, new research commissioned by the NZUS Council shows.
The Sense Partners report The NZ-US trade relationship: Stability and diversity in a time of change released today provides the latest stocktake of the New Zealand-US bilateral relationship from an economic perspective.
NZUS Council Executive Director Jordan Small said the report highlighted how valuable the US market was for New Zealand businesses with annual bilateral trade crossing NZ$21 billion before Covid-19 hit.
"As you would expect Covid has substantially impacted tourism trade with the US, with $1.3 billion wiped off our services sector exports in 2020 alone as borders closed and travel ceased. This has also impacted on the ability of businesses to form personal relationships in the US market, which is considered to be really important to succeeding there," Jordan Small said.
"Putting tourism and travel temporarily to one side, our export story is incredibly positive and shows New Zealand businesses are creating new high-value opportunities in the US. Our export profile continues to feature high-quality, sustainable agricultural products, with US consumers growing their appetite for distinctly New Zealand produce like kiwifruit, mussels, Marlborough Sauvignon Blanc wine and Mānuka honey.
"But the trade relationship is also broadening beyond our traditional strengths. While our trade with the UK, for example, is much more concentrated in high-volume meat and wine exports, in the three years immediately pre-Covid we exported more services to the US than primary exports.
"Computer-related services have continued to grow quickly, doubling in value to $1.2 billion between early 2018 and mid-2021. We also have a burgeoning space sector led by Rocket Lab, and Fisher and Paykel Healthcare’s sleep apnoea machine exports are now more valuable than timber or casein."
Complementary innovations are featuring more than competition between New Zealand and US producers.
"In many ways we are enabling each other through trade. Our agri-tech specialities, including sorting and packaging machinery, promote productivity gains in US primary sector supply chains," Jordan Small said.
"Fonterra is also increasingly collaborating with US dairy firms to supply dairy ingredients to the sports, medical and paediatric sectors. While companies like Wisk are borne from the US seeking welcoming regulatory environments to test and trial new technology - in this case flying taxis. We are well set-up as an R&D host and this is a big drawcard for some companies.
"As our trade and investment ties deepen and diversify further, we will hopefully generate more opportunities for future growth built on high-value goods and services."
A copy of the Sense Partners report can be found here. A summary infographic of the report is attached.
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