New Zealand freight movement and trade will play a key role in bringing economic recovery once the country exits level 4 lockdown, trade and export growth minister David Parker says.
“Trade alone can’t deliver the recovery but it is crucial to our economy, with one in four New Zealanders’ jobs dependant on trade,” he says.
Important trade talks have continued during the lockdown including a round of free trade agreement negotiations between New Zealand and the European Union by video conference.
New Zealand has also reaffirmed its commitment to trade alongside Singapore, G20 members Canada and Australia as some other countries implement protectionist measures.
Parker told the Epidemic Response Committee that this ensures medical supplies and equipment and other essential services.
New Zealand and Singapore agreed to drop tariffs on a range of essential goods and medical supplies to speed up trade in essential medicines and other products needed as part of the COVID-19 response.
Other steps include the rescue of Air NZ with a loan of $900m, which includes measures to secure freight links with important markets, and funding of more than $300m to support and maintain freight links.
“Right now our focus is on keeping trade flowing and maintaining critical supply chains to ensure New Zealanders have access to the essential goods they need – including medicine and PPE – and keeping New Zealand goods flowing to our trading partners,” Parker says.
“Global cooperation, not national protectionism, is the best way to address this global challenge.
“We’re supporting exporters to meet the new challenges they are facing and continuing work on further trade deals. These are challenging times for trade,” he says.
The World Trade Organisation’s forecast, released on April 8 predicts world goods trade will fall by between 13% and 32% in 2020.
But Australia and New Zealand’s exports are forecast to decrease by between 6.4% and 15.6% in 2020, because of the proportion of exports that are agriculture and processed food. These are expected to decrease by less than manufactured products and services with international tourism, transport and education particularly hard hit.
Our overall goods exports, concentrated in the primary sector, were 2% higher in March 2020 than in March 2019. Dairy exports were up 7%, meat exports 10% and seafood exports 7%, though forestry exports were down 36%.
Parker says a 2021 recovery in global trade is predicted, but depends on the duration of the virus outbreak and the effectiveness of WTO members’ policy responses.
There is also potential for trade disruption as a result of global supply chain or shipping disruption, including increased freight costs, and from protectionist subsidies by overseas governments.
“Trade links are central to New Zealand’s ability to address COVID-19, and for us to flourish as we recover from its impact on our people and our economy. Our exports and our broad trade agenda are central to that recovery,” Parker says.
