NZ’s trade drive shows value of diversified market

This week, New Zealand Trade and Export Growth Minister Damien O’Connor commenced a trade trip to Europe, which he said aimed at securing a free trade deal with the UK and the EU.

“Any country engaged in commerce sees the value in having diversity of markets, particularly in a world that is increasingly challenged through disruption, climatic events, geopolitical events or whatever,” he was quoted by a Thursday Financial Times report as saying.

While some may see the Pacific nation’s move as efforts to diversify its export market beyond China, O’Connor said that New Zealand will continue to expand its trading relationship with China despite “ructions” in China- Australia ties.

If anything, the minister’s remarks give the impression that Wellington may still have some room for policy independence even under pressure from Western allies for not being tough enough toward China.

With the rising anti- China voices in some of its Western allies, the prudence and pragmatism the New Zealand government exhibits in navigating the changing geopolitical landscape is commendable, which will benefit its own economy and its people.

China is now New Zealand’s largest trading partner, with exports to China accounting for nearly a quarter of its total exports in the first quarter of 2021. Bilateral trade between the two countries jumped from $ 4.4 billion in 2008 to $ 18.1 billion in 2020. In January this year, the two trading partners signed an upgrade to their existing free trade agreement in a sign of expanding economic cooperation in the coming years.

New Zealand’s market diversification push doesn’t mean that it will at some point face tension with China. This is because it doesn’t necessarily change the fact that China will remain a major market for New Zealand exports for years to come.

To a certain extent, Wellington’s hard- earned independence also offers the Pacific nation more flexibility in pursuit of free trade deals with others, a pragmatic approach to secure its own export stability.

New Zealand farmers and its business community, at the very least, are likely to be grateful for their government’s cautiousness in not getting involved in geopolitical tensions that they cannot afford.

By comparison, their peers in Australia are less fortunate. Just a few days ago, Western Australian Premier Mark McGowan said at Australia’s biggest oil and gas industry conference that “as a country we can and should have a good relationship with our largest trading partner, China,” calling on the federal government to end its anti- China rhetoric and mend relations with China, according to Xinhua News Agency.