Tasman trade since C.E.R.

Press, 11 May 1984, Page 12

Tasman trade since C.E.R.

Trade across the Tasman is increasing under the Closer Economic Relations agreement. Mr Templeton, the acting Minister of Overseas Trade, has quoted figures from the Australian Bureau of Statistics showing that exports from New Zealand to Australia in February were 70 per cent higher in dollar terms, than exports in February, 1983. In the same period, imports from all sources into Australia rose by only 24 per cent. According to the figures, New Zealand exports to Australia are increasing more rapidly than those of most countries. C.E.R. was intended to give a special status to trade between New Zealand and Australia. It appears to be working. New Zealand figures, however, while showing an increase, do not show the same increase. New Zealand exports to Australia during February, 1984, were about $lOO million. In February, 1983, they were $69 million. This amounts to about a 45 per cent increase. Why there should be such a large difference in the New Zealand figures and the Australian figures is difficult to say. Small differences are always to be found, but this difference is large. Mr Templeton also cites the Australian figures for the eight months to the end of February. The Australian figures show that imports from New Zealand amounted to 30 per cent more than in the eight months to the end of February, 1983. New Zealand statistics record a rise from $605.3 million in 1983 to $761.5 million in 1984 — an increase of about 26 per cent. The Australian and New Zealand figures both show there has been substantial growth in New Zealand’s exports to Australia.

Trade statistics also measure substantial growth in imports by New Zealand from Australia. The Australian figures show that Australian exports to New Zealand rose by 28 per cent in February, 1984, compared with February, 1983. The value of imports from Australia in February was $156.8 million. Again, the New Zealand statistics differ. According to them, in February, 1983, New Zealand imported goods from Australia worth $B6 million and in

February, 1984, the value was $lB2 million. This is a rise of about 112 per cent. For the eight months to the end of February, 1984, New Zealand imported goods from Australia worth $llBO million, compared with $949 million in the eight months to the end of the previous February. This is an increase of about 24 per cent.

Two conclusions may be drawn. If measurements are to be helpful, Australia and New Zealand need to devise systems of measuring the flow of trade that are roughly comparable. The other conclusion is that New Zealand still imports more from Australia than it sells there, in a ratio of about three to two. This ratio has long been about the same. Increasing trade is not altering the balance of trade.

Several factors influence the increased exports by New Zealand to Australia. One such factor is the lower value of the New Zealand dollar. This is now worth about 71 Australian cents. In February five years ago it was worth about 92 Australian cents. Since C.E.R. was introduced in January, 1983, there have been two reductions in tariffs. These, too, have helped. Greater awareness of Australia among New Zealand manufacturers, brought about by the C.E.R. negotiations, and by later campaigns to concentrate attention on the Australian market, also helped to turn thoughts to Australia.

Because New Zealand retains import licensing on a number of items, and this will not be phased out completely until 1995 (unless a decision is made otherwise), New Zealand manufacturers will have a rather more protected market for some years. The improvement in the Australian economy has also stimulated that country to import from New Zealand. But even in the weak New Zealand economy, Australian exporters have managed to sell more. For all the divergence of the statistics, it would seem that C.E.R. is working and is not giving an undue advantage to Australia or to New Zealand.