Some countries have accumulated large surpluses which, if released on the world markets, could severely damage the export trades of the primary-producing countries, including those of some of the underdeveloped countries which export soft grains. This threat to normal trade in agricultural products was so great that in 1954 CCP established a Consultative Subcommittee on Surplus Disposal (CSD), which meets about once a month in Washington D.C. New Zealand has taken a leading part in the deliberations of CSD. The Committee enables countries to cooperate in the matter of surplus disposals to reduce any possible damage to their international trade.

The work of both committees will probably grow in importance as the General Assembly of the United Nations becomes more acutely aware of the need for measures to divert the surplus production of industrial countries to quicker production and alleviate the desperate want in the less developed countries. Both committees have made and still can make useful contributions to any new scheme initiated in the General Assembly. New Zealand hopes to continue to play its part in both these FAO committees.

In 1947 FAO set up a Committee on Commodity Problems (CCP), as a standing committee of its council. New Zealand has taken a close interest in the work of this Committee, and has been an elected member since 1955. Much valuable work has been done by commodity groups established by CCP for the study of problems of the production, marketing, grading, and trade in individual agricultural commodities. CCP has also set out guiding principles for formulating and administering policies of price stabilisation, support, and disposal of agricultural surpluses.

A conference on food and agriculture, which met in May 1943 in Hot Springs, Virginia, U.S.A., set up an interim commission to make plans for a permanent Food and Agriculture Organisation. The interim commission prepared a draft constitution. After this had been accepted by more than 20 governments FAO came into being on 16 October 1945. FAO has a threefold aim: to raise levels of nutrition and standards of living of the peoples of the world; to improve the efficiency of the production and distribution of all food and agricultural products; and to improve the condition of rural peoples. Because half the people in the world are undernourished or badly fed, the work of FAO is widely supported and is considered most important by many nations with deficient or ill developed agricultural resources.

In the course of its work in the less developed countries FAO has noted the problems of unstable markets for agricultural produce. Most of these countries depend on exports of primary (mainly agricultural) produce for much of their foreign exchange. Market instability therefore hinders their orderly economic growth; and without orderly growth they find it most difficult to change agricultural patterns in a way which would increase productivity and thus raise standards of living.

New Zealand has been represented at each of the 13 FAO conferences held to date and has been elected on several occasions to membership of the FAO Council which is responsible for the oversight of the Organisation between the biennial conferences.

New Zealand's trade policies depend on the principles of GATT. GATT is unusual in that it was intended to be a temporary substitute for a permanent international trade organisation (ITO). On 18 February 1946 ECOSOC decided to call an international conference on trade and employment and set up a preparatory committee to draft a preliminary agenda and a charter for an international trade organisation. While the charter was being prepared, members of the preparatory committee decided to proceed with tariff negotiations among themselves instead of waiting for ITO to come into existence. The tariff negotiations were held at Geneva from 10 April 1947 to 30 October 1947, when the participants signed a final Act which authenticated the text of GATT. The charter for ITO, which later received consideration by member States, failed to secure the required number of ratifications and can be regarded as defunct.

New Zealand was one of the original contracting parties to GATT. The articles of the Agreement reflect the international trading experience of the participating countries in the years before the Second World War. After the gold standard was abandoned in the early 1930s conditions of international trade were exceptionally unstable. Countries vied to depreciate their exchange rates, bilateral trading and finance agreements became common, many exchange restrictions were imposed, some so stringent as to enforce the spending of export earnings in the country blocking exchange. The GATT nations were naturally anxious to have mutually advantageous rules and principles instead of the former trade chaos.

GATT aims broadly to raise living standards, to promote high levels of employment, to develop the world's resources, and to expand trade. The members undertake to use the Agreement to reduce trade barriers and to cut out discrimination in international commerce. But New Zealand's experience shows that tariff concessions negotiated in GATT are often frustrated by industrial countries' maintenance or imposition of quantitative restrictions on imports of agricultural products. It seems that nations find it harder to bring about changes in the pattern of their agricultural production than in the pattern of their industrial production. For that reason, dismantling of various forms of restriction of trade in agricultural products has been slower than for industrial products. Nevertheless, New Zealand continues to regard GATT as a forum for promoting the cause of liberal trade policies.

The Economic and Social Council (subject only to the overriding authority of the General Assembly) is responsible for trying to fulfil these aims. It is one of the six main organs of the United Nations. It is responsible under the General Assembly for directing and coordinating the policies and programmes of the United Nations in economic, social, and cultural fields. Its purposes are more specifically defined as the promotion of (a) higher standards of living, full employment, and conditions of economic and social progress and development; (b) solutions of international economic, social, health, and related problems; and (c) international, cultural, and educational cooperation; and universal respect for, and observance of, human rights and fundamental freedoms for all without distinction of race, sex, language, or religion. The Council has a wide potential field of activity. It has been called upon to develop and coordinate an increasing variety of economic and social works.

New Zealand has supported ECOSOC in its work of supervising, directing, and coordinating the economic developmental programmes of the United Nations and its related agencies. Many of these programmes are affected by the state of world trade. Trade problems are therefore a focal point in the deliberations of bodies subsidiary to ECOSOC or those connected with the United Nations which have responsibility for international economic matters.

The Council comprises 18 members elected by the General Assembly, six of whom are elected each year for a three-year term. New Zealand's second consecutive term expired at the end of 1961, and the representative of New Zealand to the United Nations was elected President of the Council for 1961. In expressing appreciation of this honour the New Zealand representative referred to the fact that, since the United Nations began, New Zealand has been “particularly conscious of the unique contribution which international cooperation in the economic and social fields can make to the attainment of world peace and security”.

Though external trade is of great importance to New Zealand, the country is not powerful enough economically to be able to bargain strongly to protect its interests in overseas markets. It therefore seeks to rely as much as possible on the economic security offered by international agreement and cooperation to supplement the traditional security of its close economic ties with Britain.

The international trade agencies concerned originate in the Charter of the United Nations signed at San Francisco on 26 June 1945. The Preamble to the Charter expresses the determination of the peoples of the United Nations to promote, among other things, social progress and better standards of life, and to that end to employ international machinery for the promotion of the economic and social advancement of all peoples.

Traditionally, New Zealand's role in the Pacific Islands' trade has been that of a supplier of agricultural products, essential foods, and, more recently, manufactured consumer goods. In turn, the Pacific Islands have supplied New Zealand with tropical fruits, sugar, and copra. This trade has been hampered by two major problems – the relative economic backwardness of many of the islands and the lack of frequent, regular, and direct shipping services to certain areas. In general, the economies of the islands throughout the Pacific depend almost entirely on agriculture, with only one or two major crops for export. Typical export commodities are combinations of coconuts (copra), cane sugar, coffee, cocoa, pineapples, and other tropical fruits. Industries are usually confined to the initial processing of such crops. Only Fiji, Papua – New Guinea, New Caledonia and the Solomon Islands have any workable mineral deposits and these are not always fully exploited.

New Zealand is well placed to provide shipping services to the islands, and in recent years there has been a marked improvement in this direction. Allied with this problem, however, is that of inadequate storage facilities, especially for refrigerated goods.

Pattern of Trade

In 1889 New Zealand's exports to the Pacific Islands (including Norfolk Island) were £300,000. More than half went to Fiji, while imports were over £200,000, most of which came from Fiji. There was also a small but growing entrepot trade with the Pacific Islands.

During the First World War New Zealand's trade with the Pacific Islands fell away because of the need to conserve supplies in New Zealand and, of greater urgency, to send New Zealand meat, butter, and other foodstuffs to the United Kingdom. After the war it became evident that the trade between New Zealand and the Pacific Islands (Samoa and Fiji in particular) had begun to fall off. This was accentuated by the introduction of a direct shipping service from Australia to the Pacific Islands, en route to Britain, which resulted in a diversion of trade away from New Zealand. When, by 1922, world prices had fallen, steps were taken by New Zealand to try to regain those markets which had been temporarily passed by, even though it was realised that the Pacific Islands could not offer a very large market.

Throughout the Second World War New Zealand provided an important source of supplies for the Pacific areas, made available under Reverse Lend-Lease without charge to the United States. In 1940 New Zealand's total exports to the Pacific Islands constituted a record, but the volume of trade established in that year was eclipsed in 1942. In the following three years, considerable quantities of meat and dairy produce were supplied to the United States forces, both in New Zealand and in the Pacific Islands, under Reverse Lend-Lease. These supplies were not regarded as exports; the volume of goods supplied to the Pacific Islands from New Zealand consequently fell sharply in 1943, the year following the conclusion of the Reciprocal Aid Agreement between New Zealand and the United States, and there was little variation over the next two years. After this, however, as a result of increased prices for many commodities, the total value of exports rose substantially in the next three years.

In recent years New Zealand's trade with the Pacific Islands has shown a steady increase. Meat, dairy products, and other foodstuffs, which New Zealand has been exporting to the Pacific Islands since before the turn of the century, have played an important part in building up trade, but of late increasing interest is also being shown in manufactured goods.

The Pacific Islands mentioned below are, with the exception of Western Samoa and the Cook Islands, all dependent territories administered by members of GATT, and consequently New Zealand's trade relations with them are in general governed by GATT. Again, New Zealand has formal commitments in regard to those islands which are British territories by virtue of the United Kingdom – New Zealand Trade Agreement which provides for reciprocal British preferential tariff treatment between those islands and New Zealand. Exports from New Zealand receive most favoured nation tariff treatment from the Society Islands, New Caledonia, and American Samoa.

Fiji

In its early years New Zealand imported its sugar requirements from Mauritius but, after 1890, Fiji displaced Mauritius as New Zealand's supplier of sugar. This caused an increase in New Zealand's imports from Fiji and virtually eliminated trade with Mauritius. By 1900 New Zealand was exchanging for the raw sugar, fresh fruits, molasses, and grain and pulse from Fiji, a wide variety of items including livestock, meat, butter, coal, timber, wooden ware, apparel and slops, bran, bags, and sacks. In the years preceding the First World War, trade between the two countries grew steadily and several new exports appeared, the more prominent being specie, cement, and potatoes. Specie ranked second to meat in value as an export to Fiji at the time.

Though New Zealand's trade with the Pacific Islands declined during the war years, trade with Fiji continued to increase. In 1917 New Zealand's imports from Fiji were the highest on record, and over the next three years they doubled in value. Raw sugar continued to hold first place; bananas made up the greatest part of the fresh fruit imported; and there was a substantial growth in imports of cocoa beans. In 1923 almost half of the total Fiji trade was with New Zealand, and direct shipping helped the trade to expand. Raw sugar remained the major item of import and this, together with practically the whole of Fiji's banana exports, made New Zealand the most important customer of Fiji. The lack of direct shipping facilities from southern ports inhibited New Zealand's export trade with Fiji and it continued to remain small.

In the early 1930s imports of sugar from Fiji showed a substantial increase. On the other hand, imports of fresh fruits declined substantially because of the effect which hurricanes had had on the crops during the previous year. But New Zealand still supplied very little of Fiji's imports. In the period 1939 to 1942, however, New Zealand's exports to Fiji grew four-fold, then declined slightly but almost doubled over the next seven years.

By 1949 imports from Fiji, though substantially reduced from the high wartime level, were still almost 20 times that of 1939. During the decade a trade in fresh apples and unprepared peas was established and meat and milk exports were expanded. In recent years, New Zealand's balance of trade with Fiji has shown a steady improvement.

Tonga

New Zealand's trade with Tonga began in 1901 when the Treaty of Friendship and Protection, which provided Tonga with Britain's protection, was ratified. In the early years trade consisted of an exchange of meats and biscuits for copra. By 1920 New Zealand was exporting goods to Tonga valued at £167,000. While New Zealand's export trade in general declined sharply during the 1929–33 period, exports to Tonga fell only slightly. By 1937 New Zealand sold mostly tinned meats, films, textile piece goods, and refined sugar to Tonga, while the main imports were copra and fresh fruit. The sale of bananas began in 1931 and since then shipments have continued to increase. Small quantities of kumaras, pineapples, and watermelons have also been sent to New Zealand. In 1964 imports from Tonga were £154,000, virtually all of which represents fruit.

New Zealand is the main supplier of goods to Tonga; in 1964 exports totalled £238,000, of which meat, butter, lard, tobacco, soap, and shooks for banana cases were the main items.

French Possessions in the Pacific

The origin of New Zealand's trade with the Society Islands can be traced back well into the nineteenth century. By 1900, New Zealand's exports to these islands were running at an annual value of £28,000, while imports were £13,000. Trade with the other French Pacific possessions had not begun, except in a few items of small value. New Zealand's trade with New Caledonia and the Tuamoto Archipelago began in 1914 and grew quite rapidly. While New Zealand's exports to Tuamotu Archipelago were negligible, quantities of dairy products, meat, sugar, films, soap, and other items were sent to the Society Islands and New Caledonia. New Zealand's imports of guano and rock phosphate from Tuamotu Archipelago grew by 1920 to a value of £74,000. From New Caledonia and the Society Islands fruits, copra, and vanilla beans were imported. After 1922 imports from Tuamotu Archipelago declined substantially and in 1937 ceased altogether. Trade with New Caledonia also fell away over this period but trade with the Society Islands remained at a relatively high level.

During the Second World War, following the capture of Nauru and Ocean Islands, New Zealand became almost wholly dependent on the Tuamotu Archipelago for her rock-phosphate requirements, and the annual average at £414,110. On the export side, shipments of cement and coal to New Caledonia ceased in 1945, while exports of foodstuffs and other merchandise to the Tuamotu Archipelago expanded considerably in the period. Wool excluded, French Oceania in the immediate post-war years absorbed practically all New Zealand's exports to the French possessions, and, notwithstanding the United Kingdom meat contracts, New Zealand has maintained her traditional interest as an exporter of canned and frozen meat to French Oceania. Rock phosphate continued to dominate New Zealand's import trade with French Oceania; imports from Tuamotu Archipelago were more than 50 per cent higher than the wartime average. The importation of guano from Walpole Island in New Caledonia, which ceased during the war, was not resumed, due primarily to the poor quality and high price of the New Caledonian product. New Zealand exports to New Caledonia declined from over £18,000 in 1948 to less than £1,000 in 1949, but have since increased substantially to total £136,400 in 1964.

Trade with the Society Islands and French Oceania (which includes Tahiti), though fluctuating from year to year, is now at a relatively high level. Frozen and canned meat, processed milk, butter, cheese, potatoes, and onions are exchanged for vanilla beans and tropical fruits and raw phosphate. New Zealand's exports to the French Pacific possessions in 1964 totalled £442,000 and imports were valued at £529,000.

Commercial trading with the New Hebrides began in 1901 in a very small way and did not increase until 1923. In 1924 New Zealand imported small quantities of uncrushed cocoa beans from the islands. Trade, however, declined in the 1930s and remained negligible until 1949, when exports to the New Hebrides rose to the value of £31,000, principally canned meat, timber, and dairy products. They remained about this level for the next five years, but then dropped substantially so that the total trade is now negligible, due mainly to a poor shipping service

Samoa

New Zealand's trade with Samoa, though small, was established long before the group of islands was partitioned between Germany and the United States in 1899. In 1900 imports from Samoa totalled £3,000, mainly uncrushed cocoa beans. In return, New Zealand supplied butter, meat, sugar, textile piece goods, soap, and other commodities worth £25,000.

The occupation of Western (German) Samoa by New Zealand troops in August 1914 led to an expansion of New Zealand's trade with the area. This has continued to expand over the years, except for the period 1929–33 when exports to Western Samoa eased a little. In later years, from 1957 to 1959, New Zealand's trade with Western Samoa almost doubled. In 1964 New Zealand's exports to Western Samoa totalled £927,000 and imports totalled £558,000. The principal items now being exported to Western Samoa are dairy products, meats, foodstuffs, fish, vegetables, margarine, tobacco, timber, and soap. New Zealand's major imports from Western Samoa are bananas, cocoa, and copra.

It is only in recent years that trade with Eastern (American) Samoa has been of any significance. Meat is the principal item exported, and accounts for two-thirds of the total value of New Zealand exports to Eastern Samoa. Imports are made up entirely of fresh fruit.

Papua – New Guinea

New Zealand trade with the territory of Papua – New Guinea, which began in 1902, was negligible for many years. In 1926–28 tinned meat and mining machinery were exported to the territory, but New Zealand's imports were nil. Trade between the two countries has continued to be very small, though recently small increases have been recorded over earlier years. In the period 1957 to 1960, exports to Papua – New Guinea increased steadily. The entry of frozen and preserved meat into the area in 1960 accounted for a substantial increase over previous years; hitherto only canned meat was imported from New Zealand. Butter was another new export to the area, while other items were machinery and some printed matter. One of the obstacles to the expansion of New Zealand's export trade with Papua – New Guinea has been the lack of a regular direct shipping service.

New Zealand's exports to Papua – New Guinea comprise meat (which is by far the most important item), dairy products, vegetables, and paper. The main item imported into New Zealand from the territory is coffee.

Nauru Island

In 1919 an agreement was drawn up between the Governments of Britain, Australia, and New Zealand, which administer the mandated territory of Nauru Island and the nearby Ocean Island, concerning the utilisation of rock phosphate mined on the islands. Under this agreement the three countries have an allocation in proportion of 42 per cent, 42 per cent, and 16 per cent respectively of the annual production. New Zealand did not import any rock phosphate from Nauru before the 1919 agreement. Thereafter, except for the Second World War period when the islands were occupied by the Japanese, substantial quantities of phosphate have been imported.

Gilbert and Ellice Islands

Virtually the only commercial products of the group are phosphate of lime from Ocean Island and copra from the remaining islands. Trade did not develop between New Zealand and the colony until after the end of the First World War. By 1928 a substantial quantity of rock phosphate was imported from the area and, in turn, tinned and preserved meats were exported to the islands. Trade continued to develop up to 1942, when the islands were occupied by the Japanese. New Zealand's trade with the Gilbert and Ellice Islands now consists of an exchange of meat and cereal preparations for rock phosphate.

Norfolk Island

Trade with Norfolk Island began in 1901 when New Zealand's exports to the area totalled £2,000, while imports were negligible. It is still relatively very small and consists mainly of exports of meat, butter, cheese, clothing, and agricultural machinery to Norfolk Island.

Cook Islands and Niue

The Cook Islands were proclaimed a British protectorate in 1888. The greater part of the island's trade is with New Zealand. The principal export commodities are bananas, and copra; other items include fancy baskets, kumaras, and the well known Niue hats. Until 1925 the export of fruit was hampered by the difficulty and irregularity of communication with New Zealand, but with the maintenance of a regular shipping service by a Government vessel these drawbacks have been removed.

Trade with the Cook and other annexed Pacific islands is not regarded as external to New Zealand, but merely as an interchange between different parts of the Dominion. The total amount of produce received from the Cook Islands in 1902 was valued at £32,163, the principal articles of produce being bêche-de-mer, lime juice, raw coffee, copra, raw cotton, fruit, candlenuts, coconuts, vanilla beans, and hats. Oranges and bananas had been the chief exports of the group, but for some years prior to 1901 they barely cleared expenses during the months of May to August. Not only was the trade showing no improvement but it was also becoming less remunerative owing to the competition of Tahiti, Tonga, Fiji, Samoa, and New South Wales. Coffee was also displaced by the flood of an inferior bean from Costa Rica that sold more cheaply.

The interchange of goods between New Zealand and the Cook Group has grown continually over the years and, as might naturally be expected, apart from copra exports, most of the trade of the group has remained with New Zealand, though by 1925 the United States had stepped into second place. Before the Second World War New Zealand had been exchanging meat, dairy products, biscuits, and refined sugar for fruit, coconuts, copra, hats, and caps. In 1937 she took two-thirds (£58,000) of the total amount of produce available for export, and in return supplied three-quarters (£61,000) of the total requirements of the group.

The United Kingdom, Japan, and Hong Kong are among the main suppliers of goods to the Cook Group, while Australia is the second largest buyer. By far the bulk of the trade is, however, with New Zealand. In 1964 she sent £1 million worth of goods to the islands and took £921,000 worth of the islands' produce in exchange.

The principal items imported from New Zealand in recent years have been foodstuffs, drapery and piece goods, oils and petrols, tobacco and cigarettes, vehicles and parts, and fruit cases and sacks. The return trade consists of citrus fruits, bananas, pineapples, tomatoes, copra, mother-of-pearl shell, clothing, jewellery and handicrafts from the Cook Islands, and copra, bananas, kumaras, and native plaited ware from Niue. Recent ventures in Rarotonga have been the setting up of plants canning orange juice, pineapples, and pineapple juice.

by John Bernard Prendergast, M.COM., Director, Overseas Trade Division, Department of Industries and Commerce, Wellington.

North America has always been one of New Zealand's major trading partners. Almost from its foundation as a colony, New Zealand began exporting to and importing from the United States, which has ever since been consistently New Zealand's second or third biggest customer and supplier. Until the end of the Second World War there were also strong trading links with Canada. In the post-war years, however, while Canada has generally maintained her position as a supplier of goods, she has become relatively less important as a customer for New Zealand exports. Trade relations today between New Zealand and the United States are governed by the GATT. While the general trade relations between New Zealand and Canada are also within the terms of the GATT, conditions of reciprocal tariff treatment are determined specifically by the Canada – New Zealand Trade Agreement.

Exports – United States and Canada

In New Zealand's early colonial days the United States became an important market for New Zealand's exports. In 1882, the year in which the first shipment of refrigerated produce left the colony, New Zealand's exports to the United States were valued at £435,000; by 1891 they had reached £515,000. Kauri gum, Phormium tenax, and gold were major exports in 1891. Ten years later, wool, skins, and sausage casings had also become major items. Until 1912 New Zealand's exports to the United States fluctuated considerably in value, with no definite indication of an increase. A peak of £716,000 in 1905 was not exceeded until 1913. Thereafter, apart from 1917, exports increased year by year to £7.5 million in 1920. In that year the United States was a customer second only to Britain, and took nearly 15 per cent of total exports. Major items of export in order of importance were: hides and skins (£3 million), lamb (2 million), gold, kauri gum, sausage casings, tallow, mutton, Phormium tenax, and oleomargarine. Exports of wool in 1920 were negligible, although there had been heavy shipments in the immediately preceding years.

In 1921 exports declined drastically by £4.8 million to 2.7 million, and thereafter fluctuated until 1940. On three occasions exports totalled over £4 million (1925, 1928, and 1937), and twice were under £1 million (the depression years of 1931 and 1932). Nevertheless, the United States kept second place as customer in 13 of the 20 years between 1921 and 1940, and third in the remaining seven years. Exports to the United States expressed as a percentage of total exports varied during this period from 8.43 per cent in 1926 to 1.94 per cent in 1932. In 1941 exports showed a sudden increase from £2.8 million to 5.2 million. Since then exports have generally tended to increase, the largest being £55 million in 1963. In this year the United States was still New Zealand's second biggest market, taking 17 per cent of total exports. The rising trend was temporarily interrupted between 1953 and 1955 mainly by falling demand (especially for wool) in the aftermath of the Korean War boom. In 1953 the United States imposed severe restrictive quotas, since intensified, on New Zealand's dairy-product exports. Thus the United States is now a closed market for any significant amount of butter, cheese, and milk powder. At the present time the main exports to that country are meat, wool, hides and skins, casein, crayfish tails, sausage casings, and cheese.

New Zealand's export trade with Canada has followed a different historical trend. There were few exports in the nineteenth century. Between 1901 and 1920 they increased considerably from £2,000 to 1.4 million, which made Canada New Zealand's fourth largest market. The main items in 1920 were (in order of importance) hides and skins, butter, meat, sausage casings, Phormium tenax, and kauri gum. In 1921 exports fell heavily and remained at a low level until 1927, when they suddenly rose above the 1920 figure. In 1929 exports reached a peak of £3.4 million, with substantial Canadian purchases of wool, meat, butter, hides and skins, sausage casings, and apples. Although exports fell in 1930, they were sufficient, at 6 per cent of the total exports, to place Canada next only to Britain as an outlet for New Zealand produce. Exports fell in the depression and did not regain the 1929 level until the Second World War. In 1943 exports were valued at £4.5 million, or over 6 per cent of total exports. After the war Canada declined as an export market. Exports rose during the Korean War, but in 1959 New Zealand exported less in value to Canada than in 1929. Canada is only New Zealand's tenth largest market, partly because New Zealand's trade with other countries has grown and partly because Canada, like the United States, severely restricts imports of New Zealand butter, cheese, and milk powder.

Imports – United States and Canada

New Zealand's import trade, although spread over more countries than her export trade, has still mainly been confined to Britain, Australia, the United States, and Canada. The United States has been exporting to New Zealand almost from the foundation of the colony, and its share of New Zealand's imports increased steadily up to 1910, when it was 11 or 12 per cent. The extension of tariff preferences in favour of goods of British origin caused a temporary drop to about 7 per cent, followed by an increase. The major items imported from the United States in 1905 were kerosene, tobacco, boots and shoes, iron and steel, machinery, tools, and implements. New Zealand's demand for these and other products, particularly motor vehicles, saw the United States, in the period between 1920 and 1930, consistently supplying 16 – 20 per cent of New Zealand's import needs. The proportion fell to about 11 – 12 per cent during 1930–40, the decline due in part to decreased imports of motor vehicles. In 1929 the United States supplied 41 per cent (by value) of the cars entering New Zealand and 53 per cent of the lorries, trucks, vans, and buses; in 1937 the respective percentages were 24 and 27. Trade declined mainly because of the high rate of exchange against New Zealand (particularly before the United States currency measures of 1933 and 1934) and the preferential tariff favouring the import of British goods. During the Second World War imports rose considerably (1943, 37 per cent of total imports); but immediately after the war the dollar shortage forced a severe drop (1950, 7 per cent). Dollar liberalisation measures, which were introduced in 1951 and subsequently progressively widened, have permitted increased exports to New Zealand, in terms of percentage of total imports, although not to 1920–30 levels. In 1964 New Zealand's imports from the United States totalled £33 million.

New Zealand's imports from Canada have fared better than its exports. Although subject to fluctuation, imports from Canada continued to rise from 1900 to the end of the Second World War. Canada, like the United States, was a “hard” currency area immediately after the war. Dollar discrimination measures consequently hindered her export trade to New Zealand until dollar liberalisation. Imports from Canada were 1 per cent of the total in 1911, 4 per cent in 1920, 9 per cent in 1930, 6 per cent in 1940, 2 per cent in 1950, and 4 per cent in 1964. In 1911 Canada was New Zealand's sixth biggest supplier, was third in 1930, and fifth in 1964. Imports have grown from £2,000 in 1891 to 12 million in 1964. Products imported in 1911 were confined mainly to fish, machinery, paper, and motor vehicles. By 1964 imports comprised a wide range of manufactured goods.

by John Bernard Prendergast, M.COM., Director, Overseas Trade Division, Department of Industries and Commerce, Wellington.

The origins of the trade between New Zealand and continental Europe are obscure, but no doubt there was at least a nucleus about the mid-nineteenth century. This obscurity continues into the later nineteenth century, for any continental trade was done through English ports and warehouses and is thus officially recorded as trade with Britain.

Exports

The history of New Zealand's export trade with Europe has always been the history of New Zealand's wool trade with European countries. European wool production fell steadily throughout the nineteenth century as more land was needed for tillage and food production. European textile industries demanded increasing amounts of raw wool and looked to the new world for supplies. New Zealand shared these wool markets mainly with Australian and South African producers.

Until the First World War, New Zealand's export trade was limited to a very few countries. Throughout the nineteenth century exports to Britain and Australia comprised practically the whole total. Exports to Germany (which early established itself as the main European market for New Zealand) and other European countries were affected by the high import tariffs maintained by these countries on foodstuffs, so that direct New Zealand exports to Europe remained an insignificant part of the export trade. Wool, together with a little kauri gum and scheelite, made up total direct exports to Europe in the nineteenth century.

No doubt more of these products, and one or two other products, entered Europe than the official statistics show. But these indirect exports did not alter the pattern of New Zealand's export trade with Europe. In 1895, when total exports were valued at £8.5 million, direct exports to Germany were ££valued at only £2,500, and Germany was the main European importer from New Zealand in that year. In 1909, when total New Zealand exports were ££19.6 million, exports to Germany were 77,000, consisting of wool, kauri gum, casings, and seeds. Exports (almost all wool) to France in the same year were £47,000. These two countries dominated New Zealand export trade with Europe to 1910, although in that year there was a small export trade with Russia, Holland, Sweden, and Denmark. By 1914, when total New Zealand exports were 26.2 million, exports to Germany were 456,000 (or 1.7 per cent of total exports); to France, £227,000; and to Belgium, £33,000.

It is clear, however, that there was a considerable export trade with European countries which is not recorded in official New Zealand statistics. In 1909, for example, exports of wool to Britain were valued at £7 million; but 2 million of this was re-exported from London to the manufacturing centres of Belgium, Northern France, and Germany. To 1914, up to 25 per cent of all New Zealand wool exported to Britain was re-exported to Europe. Other New Zealand products re-exported from Britain to Europe each year were sausage casings, kauri gum, Phormium, sheepskins, and copra (shipped through New Zealand from the Pacific Islands). It would seem, therefore, that up to 1914 about 15 per cent of total New Zealand exports by value each year went to Europe, either direct or through Britain.

The First World War saw the first break in the steady increase in trade with Europe which had marked the previous three to four decades. Exports to Germany ceased after 1914 and did not really begin until the early 1920s. Exports to France, however, increased steadily throughout the war, and by 1918 had quadrupled their 1914 value. Exports to other continental countries stopped completely throughout this disturbed period. In the twenties the pre-war pattern of trade with Europe was reestablished. The removal of the embargo on imports of German goods from 1 September 1923 was responsible for the huge increase in exports to Germany in 1924 – over £1 million, compared with £190,000 in 1923. A similar pattern of re-exports from Britain to Europe took place, although the percentage by value of total New Zealand export trade with Europe averaged from 10 to 12 per cent, somewhat lower than the pre-war average. In the 1930s France replaced Germany as the major market. In certain years exports to Belgium were even greater than those to Germany.

New Zealand trade with Europe ceased during the Second World War. Features of the post-war trade with Europe have been the preponderance of wool as the major export; the rise in the importance of Italy as a buyer of New Zealand products, along with France (the major market), West Germany. and Belgium; restrictions imposed in all European countries on imports of meat and dairy produce, which has severely limited exports of New Zealand produce; the formation of the European Economic Community, whose common agricultural policy is likely to make it increasingly difficult for New Zealand to expand exports of foodstuffs to Europe; and the irregular but, nevertheless, substantial purchases of New Zealand wool by eastern European countries, notably the U.S.S.R. and Poland.

Imports

In the nineteenth century New Zealand imported mainly from Britain and Australia, but no doubt manufactured goods from Europe came through Britain. As, however, New Zealand exports to Europe expanded in the later nineteenth century, imports also increased. By 1892 Germany was the major European supplier – direct imports from that country being £90,000 out of a total New Zealand import of £7 million. Small imports of a few thousand pounds each are recorded from France, Belgium, Holland, and Italy. In 1910 imports from Germany were £390,000 out of a total import figure of £17 million. The main imports from Germany were glassware, musical instruments, tools, fancy goods, and even cloves and grass seeds; those from France, wines and spirits; from Italy, almonds and marble; and from other European countries, dried and preserved fruits and foods, chemicals, and fancy goods. By 1914 Germany was supplying £610,000 out of total imports of £21 million. It is interesting to note that imports from Switzerland at this time were mainly confectionary and textiles. Import trade almost ceased from 1914 to 1918, although regular imports were recorded from Italy and Sweden. A ban on imports from Germany in the early 1920s meant that France and Italy were the major European suppliers to New Zealand, although the value of imports from the Continent was a small part of total New Zealand imports.

Imports from Europe showed a small but steady increase up to the Second World War; their origin and range were more diverse. For example, in 1926 New Zealand imported nearly £1 million or 2 percent (of a total of £49 million) from European countries, with Belgium and France the largest suppliers. By 1939 the percentage had risen to 9.4 per cent of the total imports and Germany was again the largest exporter to New Zealand, with a wide range of commodities, especially clothing, steel goods, hardware, and paper. Other exporters of any size were Czechoslovakia (glass and hosiery), Italy (silk goods), France (silks), Sweden (hardware, agricultural and dairying machinery), Belgium (glassware), Finland (paper), and the U.S.S.R. (motor spirit). Post-war Europe contributed only a small percentage of New Zealand imports (3.5 per cent in 1949). But the rapid rate of European reconstruction and industrial expansion has led to a significant increase in imports from continental Europe (9.5 per cent of total imports in 1964). In 1964 the seven major European exporters to New Zealand were Western Germany (£8.8 million, from a wide range of commodities, especially machinery, cars, fertilisers, and optical instruments); the Netherlands (£3.9 million, the major item being electrical machinery); Switzerland (£3.0 million, mainly pharmaceutical products and watches); Sweden (£3.0 million, mainly machinery and paper); Italy (£3.0 million, mainly fabrics and cars); France (£2.5 million, mainly cars and wines); and Belgium (£2.4 million, mainly steel, glass, and fabrics). Finland, Norway, Denmark, Austria, Czechoslovakia, Portugal, Spain, and East Germany contributed smaller amounts. The value of imports from European countries in 1964 amounted to £29.94 million out of a total import expenditure of £317 million.)

by John Bernard Prendergast, M.COM., Director, Overseas Trade Division, Department of Industries and Commerce, Wellington.

Early Development

Countries of the East, particularly China and India, have traded with Europe almost throughout the history of Western civilisation. This trade was changed and expanded by the productivity which the industrial revolution in Europe brought in its train. As far as New Zealand was concerned, although its immigrants of the nineteenth century were mainly of European stock, the colony in its early years had little commerce with the countries of Asia and the Far East. The main reason for this state of affairs was that the industrial revolution had not reached those countries and they, like New Zealand, had economies based largely upon primary production. The nature of their industries did not allow much scope for a mutual trade in raw materials or finished goods. By far the greatest trade was with China, which supplied quantities of tea, some textiles and, during the 1860s, purchased seal skins, the product of the almost defunct seal fisheries. In the latter half of the nineteenth century New Zealand developed a flourishing shipbuilding industry, and small quantities of teak and other hardwoods were imported from Burma, and sisal and hemp from the Philippines and from Java. It was in 1881 that shipments first came to New Zealand directly from India and Burma, the former supplying jute which previously had come via Britain. At about the same time Japan began supplying the New Zealand market with fancy goods, rice, silk, and cotton goods, but until about 1900 the annual value of imports from that country rarely exceeded £10,000.

By about 1890 Ceylon had begun to surpass China as a supplier of tea, and after 1903, when preferential duty rates of 2d. per pound were extended to teas from British possessions, the tea trade with China almost disappeared. Tea and jute were also supplied by India, but trade with that country was supplemented by exports from New Zealand. In 1887 the Union Steam Ship Co. inaugurated a direct shipping service between New Zealand and Calcutta which ran three times yearly for several years and catered for shipments of horses purchased by the Indian Army. Bullion and wool and, later, tallow became other items of export to India. At the present time tallow and milk powders are the main items exported to India, others being wool and some dairy machinery and equipment. Imports from India include jute, textiles, tea, and, until recently, large quantities of petroleum spirit. In 1964 the value of imports from India was £49 million and the value of exports was £734,000. The shipping service between India and New Zealand includes scheduled ports of call at Singapore, Malaysia, Burma, Ceylon. Imports from Ceylon in 1964 (mainly tea and coconut) were valued at £21 million, and exports (tallow, dairy products, and other foodstuffs) were valued at £276,000. During 1920 and 1921 the value of trade with Ceylon and India was as follows:

Changing Trade Pattern

The First World War changed the pattern of trade with a number of countries in the area, and some of the change was the result of technological advances made in the use and development of new materials. Until 1914 Japan had supplied less to New Zealand than had either India or Ceylon, but after that date the quantities of textiles – mainly silk – and apparel supplied increased rapidly. A peak was reached in 1920 when imports from Japan were valued at 1,470,071, the largest amount to that time ever imported from any one country of the East. Exports (some wool, some scrap metal), made to Japan were of no great amount and were valued at £4,904 in 1920 and 20,149 in 1921. The Second World War interrupted the trade with Japan, but, from about 1947 onwards, trade and exports in particular began to grow again, with wool and dairy products becoming important items. The inauguration of a shipment of meat in 1953 and of a shipment of logs in 1957 led to considerable exports of those goods. The trade in meat was almost wholly in beef and it received a setback in 1957 when the high prices being offered by the United States diverted supplies to that country. A trade in mutton, however, arose and is now well established. Meantime, Japan had become a source for some base metals, electrical and industrial machinery, and other goods, in addition to the traditional trade in textiles. Silk, however, had largely been displaced by cottons and textiles made from synthetic fibres. In 1958 New Zealand signed a trade agreement with Japan under which each accorded the other most favoured nation tariff treatment. The agreement was revised in 1962.

The following table shows exports to and imports from Japan.

Indonesia

New Zealand has had a long-standing trade with Indonesia, but little of this trade has been in exports. Between the wars, Indonesia became an important supplier of rice, of tropical fruits, and of sisal, hemp, kapok, and raw rubber. In the aftermath of the Second World War, Indonesian goods were in short supply and imports were mainly confined to petroleum, oils, kapok, sisal, and raw rubber. On the other hand, Singapore and also Malaysia have become quite a useful market for New Zealand goods, as well as being a source for certain base metals, rubber, canned pineapple, and some timbers. Singapore's role as an entrepôt port is of use also in diverting the export of New Zealand goods to Sarawak, North Borneo, and Brunei.

Summary of the Trade

In 1961 New Zealand and Malaysia signed a trade agreement under which each country gives reciprocal British preferential rates of duty to the other upon certain commodities.

Philippines and China

Both the Philippines and China had early developed trading ties with New Zealand, but it was some time before exports began to flow to those countries. China's war with Japan and her internal political difficulties might have stimulated her buying New Zealand wool; on the other hand, it might have made it difficult to develop trade in New Zealand meats and dairy products. The close association of the Philippines with the United States effectively restricted export avenues for New Zealand goods. After the Second World War, however, New Zealand was able to supply meats and dairy products to the Philippines; China became a more substantial buyer of wool, of tallow, and, on occasion, of wood pulp. Given suitable conditions, trade with the two countries could grow as regular shipping links (inaugurated in 1956 with the Philippines, in 1962 with China) have been established.

Summary of the Trade

The 1939–45 war accelerated the development of Hong Kong as an entrepôt centre and as an international free port. During the 1950s Hong Kong became an established supplier to New Zealand of cotton textiles and garments. By the same token, Hong Kong became a market for meats, dairy products, and for quality foodstuffs such as quick frozen vegetables. This trade is well established and supported by a number of shipping services.

Summary of the Trade With Hong Kong

by John Bernard Prendergast, M.COM., Director, Overseas Trade Division, Department of Industries and Commerce, Wellington.