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New Zealand trades goods with Asia, services with Australia

This article looks at New Zealand's trade relationships. Our statistics show:

  • Asia is an increasingly significant export market for New Zealand goods
  • services trade is still dominated by traditional markets
  • services trade is mainly with our top investment partners.

Asia is an increasingly significant export market for New Zealand goods. Goods exports to Asia accounted for 40 percent ($18.3 billion) of the total value of exports in the year ended June 2011 (compared to 33 percent in 2005). This increase was partly driven by a rise in the value of dairy products exported to China.

Asia is also becoming a more significant source of goods imports. In 2011, Asia accounted for 43 percent ($19.5 billion) of the total value of goods imports (compared with 38 percent in 2005). This corresponded with a fall in the proportion of goods imported from Australia. New Zealand imported more mineral fuel and oil from Asia but less from Australia.

Trade in commercial services shows a different pattern. New Zealand’s trade in commercial services is dominated by companies trading with Australia, North America, and the European Union.

There has been some growth in services trade with Asia. For example, trade in business services with Singapore has increased, as has trade in sales services with China.

New Zealand companies often pay management fees to foreign head offices or receive them from overseas subsidiaries. In the balance of payments, this is classified as trade in business services. As Australia, the United States, and the United Kingdom have traditionally been New Zealand's top investment partners, services trade with these nations remains significant.

Exports of commercial services to Australia, North America, and the European Union collectively accounted for 73 percent ($2.9 billion) of the total value of commercial service exports in 2011. In comparison, goods exports to these regions accounted for only 43 percent of the total value of goods exports.

Graph, Proportion of exports, by geographical region, year ended June 2011.

In addition to management fees, exports of commercial services to Australia, North America, and the European Union mainly include services related to film production (mostly North America) and computer services, as well as royalty payments received by New Zealand companies.

Imports of commercial services from Australia, North America, and the European Union collectively accounted for 78 percent ($4.5 billion) of the total value of commercial service imports in 2011. Imports of goods from these regions only made up 44 percent of the total value of goods imports. 

Graph, Proportion of imports, by geographical region, year ended June 2011.

While management fee payments also dominate imports of services, New Zealand also makes significant payments to Australia, North America, and the European Union for engineering and technical services, computer services, and royalties.

An analysis of New Zealand’s trade in goods and services by industry shows that goods exports are highly dominated by the agricultural sector. Exports of dairy, meat, and wool were $20.0 billion for the year ended June 2011 (44 percent of goods exports).

Exports of commercial services are dominated by the high-tech industries. Exports of professional and technical, and information media and telecommunications services were $2.2 billion collectively (55 percent of commercial service exports). 

Graph, Exports of commercial services, by industry, year ended June 2011.

While Asia has become New Zealand’s primary goods export market, the pattern of New Zealand’s trade in services is very different. For the year to June 2011, nearly half our goods exports went to Asia, while service exports were dominated by Australia and North America.

See Overseas Merchandise Trade statistics for more information about trade in goods or the Census of International Trade in Services and Royalties for commercial services trade data. 

Back to Economic News: April 2012

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