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Mr Craig Knowles (2nd from left) with Senator Zed Seselja (standing) Minister for International Development and the Pacific, meeting with senior New Zealand Trade and Pacific Ministers, as well as senior representatives from NZ-Pacific business councils. Image supplied by Austrade

New Zealand: Aussie exporters’ number one market destination

Australia and New Zealand are natural allies with a strong trans-Tasman sense of family.

Migration, trade and defence ties, keen competition on the sporting field, and strong people-to-people links have helped shape a close and co-operative relationship. Until the current COVID-19 restrictions, hundreds of thousands of Australians and New Zealanders crossed the Tasman each year as tourists, for business purposes, or to visit family members.

“New Zealand is Australia’s seventh-largest export market by value but is the number one market destination for Australian exporters,” says Mr Craig Knowles AM, Consul General and Senior Trade Commissioner New Zealand.

“Our shared similarities and unique relationship are often why new exporters use New Zealand as a test case and learning experience before expanding into other markets. Despite COVID-19, there are significant commercial opportunities in New Zealand due to continued freight accessibility.”

Mr Craig Knowles AM, Consul General and Senior Trade Commissioner New Zealand. Image supplied by Austrade

Australia’s merchandise trade with New Zealand in 2019-20: 

  • Exports – A$10,090 million     Imports – A$7,535 million    
  • Total merchandise trade (exports + imports) – $A17,625 million
  • Exports of services to New Zealand – A$5,589 million                         
  • Imports of Services A$5,475 million

 More comprehensive trade data can be found on the DFAT website. 

Free trade agreements

The economic and trade relationship between Australia and New Zealand is shaped by the Australia New Zealand Closer Economic Relations Trade Agreement (also knowns as the CER agreement or ANZCERTA), which came into effect on 1 January 1983. 

ANZCERTA is one of the world’s most open and successful free trade agreements. Two-way trans-Tasman merchandise trade has increased at an average annual rate of around eight per cent following its adoption. 

It covers substantially all trans-Tasman trade in goods, including agricultural products, and was the first to include free trade in services.

Building on the CER Agreement is the creation of a seamless trans-Tasman Single Economic Market (SEM) business environment. Previous work has been achieved around food standards, services protocol, free movement of people, trans-Tasman mutual recognition arrangement and investment protocol.

Australia and New Zealand are also part of the Pacific Agreement on Closer Economic Relations Plus (PACER Plus) – a development-centred free trade agreement. 

PACER Plus entered into force on 13 December 2020, with New Zealand, Australia, Samoa, Kiribati, Tonga, Solomon Islands, Niue and Cook Islands all Parties to the Agreement. Nauru, Tuvalu and Vanuatu have signed the agreement but have not ratified it. This agreement is an important part of Australia’s engagement in the Pacific and provides an avenue to help foster a secure, stable, and prosperous region. More information can be found here.                     

In 2009, New Zealand and Australia signed a Free Trade Agreement with the ASEAN regional block of 10 countries called the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA). More information about the agreement can be found here.  Australia and New Zealand are also member countries of the TPP-11.

These agreements open up enhanced opportunities for Australian exporters keen to enter the New Zealand market.   

Lucrative sectors for Australian exporters

Food and beverage 

“New Zealand is a sophisticated and highly branded market. However, as Australian food and beverage products are well respected, demand for high-end food exports continues,’ says Mr Knowles.

He identifies the following growth areas:

  • products that are not locally produced
  • premium, fresh and counter-seasonal products
  • raw materials for local production as New Zealand is moving towards more value-added processed foods
  • organic, gluten-free and vegan goods
  • healthy convenience is a growing trend – food to go and single-portion packaging
  • collaboration in food research, including food safety such as AusGrainz and The Fresh Produce Safety Centre Ltd.

Agritech

New Zealand’s agribusiness expertise provides opportunities to collaborate on precision agriculture technologies, connectivity and smart farm management technology and practices.

Infrastructure

The New Zealand government’s significant commitments to water and civil infrastructure over the next decade provide numerous opportunities for Australian businesses. 

Some of these projects include:

  • Canterbury Rebuild:  which is focused on improving public infrastructure in precincts across Christchurch that have been impacted by earthquakes and previously overseen by the Earthquake Recovery Authority (CERA).

 Auckland Housing: There are opportunities for the development of well connected, medium-high density communities with quality urban design at an affordable price. Developments need to be at 500 or more homes, and New Zealanders need examples of good urban development to showcase, educate and sway public opinion.

  • Roads of National Significance (RoNS): with the NZ Government focused on economic growth, supporting infrastructure development is one of the key priorities to achieving this goal. The project involves upgrading seven roads as they are critical to moving people, goods, and services safely and efficiently.

Emerging opportunities for Australian exporters

Aviation – maintenance and training

Mr Knowles says that increased demand from a large and growing tourism sector in New Zealand has encouraged local and global airlines to expand their flight capacity. 

This has placed pressure on existing infrastructure and as a response, New Zealand airports are undergoing infrastructure upgrades. Mr Knowles say that this has translated into opportunities in passenger screening, airline training, and more manufacturing, repair and overhaul (MRO) services.

“New Zealand also has a growing aircraft manufacturing and repair services industry which is expected to continue to grow, particularly from airlines as tourist activity increases,” says Mr Knowles.

“This has led to a demand to increase the capacity of existing aviation infrastructure in services and training, as with a shortage of pilots.

“Flying schools want experienced training staff as senior instructors are being headhunted by major airlines. Flying schools have long been a recruitment pipeline for airlines, but the increased exodus of experienced staff restricts capacity as demand for pilot training grows.”

Defence

Interest in supply chain diversification due to COVID-19 provides opportunities in the defence industry and advanced manufacturing space. 

Mr Knowles continues: “New Zealand’s space program wants to attract international entrepreneurs, researchers, businesses and investors interested in advancing areas where New Zealand has existing strengths – space-based data applied to agricultural technology, hazard management, oceanography and meteorology.

“This interest also extends to unmanned Aircraft Systems (UAS), unmanned aerial vehicles (UAVs) or Remotely Piloted Aircraft Systems (RPAS) for commercial and recreational use.”

Science and research

Collaboration between Australia and New Zealand in science, research and innovation is underscored by the 2017 Australian New Zealand Science, Research and Innovation Cooperation Agreement. 

What challenges does the New Zealand market pose?

“Like all economies, New Zealand has been affected by COVID-19, though not to the extent predicted,” says Mr Knowles.

“New Zealand’s initial domestic restrictions triggered lows in economic activity. However, card spending has recovered to exceed pre-COVID levels, though this will be affected by any future outbreaks. 

“The New Zealand government will focus on infrastructure as an important part of the COVID-19 economic recovery.”

Trade and Investment information

Austrade’s website has a New Zealand country page which includes the following information to help exporters:

  • Market profile
  • Doing Business 
  • Austrade assistance

To learn more about how Austrade can help your business, visit austrade.gov.au


Read more: The UK: Aussie exporters discover new opportunities in a familiar market

Read more: India: A vast and vibrant market for Aussie exporters


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Clare Loewenthal

Clare Loewenthal

Clare is an author, business commentator and passionate contributor to Dynamic Business. She was the Founder and Publisher of Dynamic Small Business magazine, which became Australia’s largest small business publication.

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