TRADE WITH THE PACIFIC ISLANDS
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.
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.
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
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.
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.
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.