TRADE WITH CENTRAL AND SOUTH AMERICA AND THE CARIBBEAN
Three factors have dominated (and to a lesser extent still dominate) the history of trade between New Zealand and Central and South America and the Caribbean. First, the general similarity in national economies; secondly, the relatively underdeveloped nature of the Central and South American and Caribbean economies and hence the generally low industrial activity and consumer spending power; and, finally, the lack of regular and frequent shipping services. New Zealand's trade relations with the following countries are governed by the GATT: Brazil, Chile, Cuba, Dominican Republic, Haiti, Jamaica, Nicaragua, Peru, and Uruguay. Argentina has acceded provisionally to the GATT. New Zealand and Argentina at present treat each other as “most favoured nations”. Trade relations with British colonies in the area are governed by the terms of the New Zealand – United Kingdom Trade Agreement and, in general, by the GATT.
New Zealand's exports to Central and South America and the Caribbean have been slow to develop and, even now, the area does not take much of New Zealand's total export. Up to 1920 there were hardly any exports to the area. Argentina, Chile, and Uruguay were regular but small customers, while sporadic shipments were made to various other countries, mainly of apples, sheep, and bunker coal. It is likely that purchases of New Zealand produce by the area were greater than official statistics reveal, for these would not show the extent to which New Zealand produce was re-exported by such entrepôt centres as Britain. This qualification would also apply to some degree today.
The period 1920–42 saw a little more trade with Argentina, Brazil, Uruguay, the British West Indies, and the Panama Canal Zone. Exports to the first three countries fluctuated considerably with no definite trend. A large shipment of potatoes to Uruguay in 1937 caused exports to rise to £127,000, at that time the highest to any one country in the area. Shipments to the Argentine reached a peak of £74,000 in 1929, but between 1931 and 1935 export values were under £5,000 each year. Major items of export were apples and sheep. During the 1920s exports to the British West Indies and the Panama Canal Zone were negligible, but in the 1930s trade (mainly in butter) improved markedly, particularly to the Zone. Between 1930 and 1942 exports averaged £66,000 a year to the Panama Canal Zone and £40,000 to the British West Indies. Exports to other countries in Central and South America and the Caribbean, except to Chile, were very small and intermittent. During these years Chile was a regular customer, but exports in any one year were always below £20,000. Trade came almost to a standstill during the Second World War, but in 1946 came the resumption, when exports to the British West Indies and Argentine jumped from nil to £43,000 (mainly butter) and £21,000 (apples, sheep) respectively.
The introduction of a direct shipping service to the west coast of South America and the Caribbean in 1958 considerably helped to develop New Zealand's export trade, as can be seen from the following figures: in 1964 exports to the British West Indies were valued at £36 million; to Peru, at £538,000; Panama and the Canal Zone, £285,000; Netherlands Antilles, £252,000; and Mexico, £279,000. Meat and dairy products are the major items, although Mexico has been buying wool. Apart from the odd shipment (mainly sheep), exports to the east coast of South America have fallen away after the war. This development is in part a reflection of the growth of the agricultural economies in Argentina, Brazil, and Uruguay.
Up to and including 1919, New Zealand's import statistics were recorded on the basis of country of shipment (and not on country of origin, which has since been the case). As a result, the extent of New Zealand's actual purchases from countries in the Central and South American and Caribbean area is obscure. Available statistics reveal that imports from the area up to 1919, expressed as a percentage of total imports, were very small. Between 1900 and 1919 the British West Indies was a consistently small supplier, the peak year being 1919, when imports (mainly cocoa beans and rum) were worth £9,000. Between 1910 and 1919 there was also a small and regular import trade with Chile (nitrate of soda) and Cuba (cigars). The value of imports from each of these countries was under £10,000 in every year. Negligible and spasmodic shipments were received from some other countries in the area. This lack of trade was due mainly to New Zealand's major demand for manufactured goods, which the underdeveloped economies in the area could not supply. In the next 20 years imports from a number of countries fluctuated considerably, with no clear-cut trends. The British West Indies continued to export cocoa beans and rum, together with some asphalt and bitumen. In the 1930s shipment of these items declined, to be replaced by fruit. Imports from this source averaged £26,000 in 1920–29 (with swings from ££15,000 in 1925 to 36,000 in 1929) and £42,000 in 1930–39 (with swings from 14,000 in 1933 to 67,000 in 1930).
In 1926 Cuba began exporting large amounts of sugar to New Zealand (£383,000 in 1926, 330,000 in 1927). Shipments declined heavily in 1931–35, recovered somewhat in 1936 (£189,000), but then petered out. Peru (in 1924, 1927–28, 1930, and 1939) and the Dominican Republic (in 1939) also supplied large amounts of sugar to New Zealand. Between 1929 and 1939 Mexico was a frequent supplier of asphalt and bitumen, the peak coming in 1928, when imports were valued at £71,000. In the same period Chile had a small trade in nitrate of soda, and Brazil in shipped cocoa beans, edible nuts, and precious stones. During the war (1940–46) imports from the British West Indies, Brazil, the Argentine, and Chile remained few and fluctuating. In 1943 manure replaced nitrate of soda as the major import from Chile. Imports from Peru, however, expanded in a spectacular fashion. This time it was oil, not sugar. Between 1942 and 1946 New Zealand's purchases of oil averaged £1,043,000 a year.
Since the war New Zealand has imported much more from the area, particularly minerals and oils. The Netherlands Antilles, Venezuela, Peru, and the British West Indies have become important suppliers of motor spirits and oil to New Zealand. Other imports are sodium nitrate from Chile, sulphur from Mexico, nuts and wax from Brazil, and fruit and rum from the British West Indies. As the economies of New Zealand and the countries in Central and South America and the Caribbean develop, New Zealand's imports from the area should continue to increase.
by John Bernard Prendergast, M.COM., Director, Overseas Trade Division, Department of Industries and Commerce, Wellington.