Trade can help economy rebound, rebuild and recover

Trade can help New Zealand to rebound, rebuild and recover from the COVID 19 pandemic,  Minister for Trade and Export Growth David Parker said.

“Trade alone can’t deliver the recovery but it is crucial to our economy, with one in four New Zealanders’ jobs dependant on trade.

“We’re taking steps to support the health response to COVID-19 that support exporters and that will help New Zealand rebuild and recover in the medium term.’

They include the recently-announced commitment, alongside Singapore, G20 members  Canada and Australia, and a number of other nations to keep trade open, especially in medical supplies and equipment and other essential services, as some countries implement protectionist measures, David Parker told the Epidemic Response Committee today.

New Zealand and Singapore took that a step further yesterday, with an initiative to drop tariffs on a range of essential goods and medical supplies and expedite trade in essential medicines and other products needed as part of the COVID-19 response. 

Other steps include the rescue of Air NZ with a loan facility worth $900m, which includes measures to secure freight links with important markets, and funding of more than $300m to support and maintain freight links.

“Right now our focus is on keeping trade flowing and maintaining critical supply chains to ensure New Zealanders have access to the essential goods they need – including medicine and PPE - and keeping New Zealand goods flowing to our trading partners,” David Parker said..

“Global cooperation – not national protectionism - is the best way to address this global challenge.

“We’re supporting exporters to meet the new challenges they are facing and continuing work on further trade deals. During the lockdown New Zealand and the EU have held a round of FTA ‘virtual negotiations’ by video conferencing.

“These are challenging times for trade. The World Trade Organisation’s Forecast, released on 8 April, predicts world goods trade will fall by between 13% and 32% in 2020.

But Australia and New Zealand’s exports are forecast to decrease by between 6.4% and 15.6% in 2020, because of the proportion of our exports that are agriculture and processed food, which are expected to decrease by less than manufactured products and services with international tourism, transport  and education particularly hard hit.

Our overall goods exports, concentrated in the primary sector, were in fact 2% higher in March 2020 than in March 2019.  Dairy exports were up 7%, meat exports 10% and seafood exports 7%, though forestry exports were down 36%.

A 2021 recovery in global trade is predicted, but depends on the duration of the virus outbreak and the effectiveness of WTO members’ policy responses. 

There is also potential for trade disruption as a result of global supply chain or shipping disruption, including increased freight costs, and from protectionist subsidies by overseas governments.

“Trade links are central to New Zealand’s ability to address COVID-19, and for us to flourish as we recover from its impact on our people and our economy. Our exports and our broad trade agenda are central to that recovery,” David Parker said.