TRADE WITH NORTH AMERICA
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.