By the very nature of its geography, trade plays an essential part in New Zealand’s economy. Where once the small, South-Pacific country looked to neighbour Australia and the United Kingdom as a home for its mostly agricultural products, today the focus is very much more on the dynamic economies of Asia and beyond.
The Gulf Cooperation Council area is now New Zealand’s seventh largest export destination with goods last year worth NZ$1.4 billion ($1.2 billion) shipped to the region. New Zealand has identified the GCC as a major growth area for its goods and a free trade agreement is awaiting final approval from the oil-rich group of countries.
Here, New Zealand’s Trade Minister Tim Groser tells The Wall Street Journal just how significant the region is becoming and how New Zealand industry is changing to meet the demands of its Middle East trade partners.
WSJ: New Zealand has made a point of identifying the Middle East, and specifically the GCC region, as a major growth market for exports. How significant do you see this region becoming in the next five years?
Mr. Groser: “Last year the New Zealand Government launched the NZ Inc Gulf Cooperation Council (GCC) Strategy, which outlines New Zealand’s plans for further developing strong government and private sector relationships with the GCC. The three key goals of this five year strategy are to build strong and enduring political relationships with the GCC, expand trade and economic relationships with the region, and enhance our connectivity with the region.”
“New Zealand exports to the Middle East have increased on average 10% per year over the last decade. Our trade with the GCC is already strong, and we are committed to strengthening this. We believe there are significant opportunities for New Zealand to partner with the GCC in the coming years in a number of sectors including food and beverage, agriculture and food security, and also around construction manufacturing and technology particularly in the lead up to Dubai World Expo 2020.”
WSJ: NZ’s export reputation has been built around agriculture. Beyond this sector, what industry, in your opinion, has the greatest export potential to the GCC?
Mr. Groser: “It is true that New Zealand is known around the world for its agricultural expertise, and as a producer of high-quality, safe food and beverage, and these will continue to dominate our exports to this region, particularly given the food security issues and demand for food that this region has.”
“New Zealand, like the U.A.E., is known internationally for one key thing: we face the challenge of needing to diversify our commodity exports, which is why we are investing in other areas, even if they may be small and niche. New Zealand has strong expertise in health technology, marine engineering and specialist construction systems, and we see particular potential for these in this region.”
WSJ: How is NZ industry changing to meet the demands of shariah-compliant trade partners in places like the Middle East?
Mr. Groser: “New Zealand is the world’s largest exporter of halal food so we absolutely understand the demands of regions such as the Middle East. Our tourism and education industry leaders are also aware of the special requirements of Muslim consumers and are working with the industry to promote our halal-focused credentials.”
WSJ: NZ’s milk industry was rocked last year when Fonterra acknowledged that traces of the chemical dicyandiamide, or DCD, were found in milk powder. Given dairy’s importance to NZ’s economy, how hard has it been to repair the country’s trade reputation?
Mr. Groser: “We are acutely aware of the impact that this incident, and also the precautionary recall of Fonterra products containing some batches of whey protein concentrate, has on our international reputation for food safety and integrity. This is why we invest so much in ensuring that our food safety, biosecurity, animal welfare, and environmental management systems are world class.”
“Despite these incidents, New Zealand’s milk powder, butter and cheese exports rose 38% to $1.57 billion in February 2014. Dairy products accounted for about 31% of the nation’s annual exports, and 44% went to China.”
Source: WSJ