N.Z.-Canada trade poor relation

Press, 15 August 1984, Page 38

N.Z.-Canada trade poor relation

By

BRUCE STEWART

In its search for another trade option to the United States, Canada shows a growing interest in the Pacific rim countries. Already (1983) Canada’s trade with these countries totals about sCanl7 billion (about ?NZ25.9 billion) — in imports plus exports. New Zealand shares in that interest. But present trade between the two countries suggests room for growth. First, some facts and figures. In 1983, Canada exported sCanl22M (about $NZ185.75M) worth of goods to New Zealand. This was 0.1 per cent of Canada’s total exports. Canada imported sCanls7M (SNZ239M) worth of goods from New Zealand, representing 0.2 per cent of .Canada’s imports. From New Zealand’s point of view, Canada was. its ninth largest market, taking 1.9 per cent of its exports, and supplying 2.3 per cent of New Zealand’s imports. The dollar volume of trade between Canada and New Zealand is roughly the same as that between Canada and Malaysia, or between Canada and Singapore. The largest single import by New Zealand from Canada for the last two years has been sulphur, but the list includes a variety of manufactured goods. In contrast, New Zealand’s exports to Canada are mainly food stuffs. It would surprise many Canadians that beef — $Can7lM (SN2IOBM) in 1983 - far outstripped lamb $Can29M (SNZ44M). New Zealand is traditionally perceived by

Canadians as sheep country. Apart from G.A.T.T., trade agreements go back to the 1932 preferences for New Zealand agricultural products in Canada. More recently, a 1971 Amending Protocol included formation of a Joint Consultative Committee, and 1973 letters of agreement maintained mutual trade relationships after Britain entered the Common Market. The Joint Committee, to meet biennially, in fact met in 1971, 1974, and 1975 with no further meeting till 1983. By then the countries had signed the Agreement on Trade and Economic Cooperation (1982). A Canadian note says it, “Provides for the continued exchange of E- -ential tariffs on a range of products, enhancing the competitiveness of Canadian manufactured goods in New Zealand.” Neither Canadian nor New Zealand representatives in Ottawa see any major problems in trade relations between the two countries. But there are some irritants described as “minor.” Canadians point out that the balance of trade is almost always in New Zealand’s favour, last year $Can34M (SNZSI.76M). An exception was 1982 when Canada had a sCanl7M (SNZ2S.BM) balance in its favour. In part, they feel, New Zealand’s favourable balance is due to her import licensing. In the late 19705, for instance, about twothirds of New Zealand goods entered Canada under benefit of preference, while only one quarter of Canadian

goods entered New Zealand under preference. Naturally, Canada welcomes New Zealand’s decision to liberalise its licensing system over the next few years. For their part, the New Zealanders feel that Canadian import restrictions and quotas on meat have eroded the 1932 preferences and want to see freer access. Generally, then, relations between Canada and New Zealand are at present based more on good will than they are on dollar volume of trade. Neither has much dependency on the other, though New Zealand somewhat more than Canada. For both New Zealanders and Canadians the United States presents a powerful magnet. New Zealand exports to the United States recently ran at about SUS74SM (SNZI.SII billion), a year with exports at just under SUS9OOM ($NZ1.862 billion), more than five times as large as New Zea-land-Canada trade. The 240 M Americans versus the 24M Canadians make it almost inevitable that New Zealand will concentrate the great bulk of its promotional money and efforts in the United States. Footnote.— All currency conversions above have been made at post-devalua-tion rates. This is the second in a series of articles on Can-ada-New Zealand trade relations. The first article was printed in the business section on July 14. Brian Stewart lives in Mississauga, Ontario.