I’d been avoiding posting about the recently signed free trade agreement between New Zealand and China. Every time I talk about trade, some readers see it as a last ditch attempt to save New Zealand manufacturing, bolster my own business and keep New Zealand isolationist a la Muldoon and the 70’s.

So a disclaimer… this is written from a macro economic perspective and, I hope, with a degree of neutrality. So here goes….

Reports this morning write that New Zealand Trade Minister Phil Goff was on a mission to Hangzhou today, looking for business opportunities presented by the Free Trade Agreement with China. Goff is reported as saying;

We have a number of promising trade prospects in this region, including for our dairy and wood exporters

So this is what commerce in New Zealand has come to? Selling unprocessed milk and timber to offshore interests who will then process and add significant value to it, and reap the economic returns from that value add. How about a visit to New Zealand designers Phil, encourage them to form partnerships (or better still open their own factories) in China to take advantage of the slave labour and polluting processes smiley happy Chinese workers enjoying the clean air and green surroundings and the proximity to other markets.

Sorry – but the lack of vision really makes my blood boil. And yes I know that the computer I’m writing this on and the cellphone in my pocket are made in China – it’s not about where something is made, its about New Zealand potentially losing it’s ability to add value to raw commodity products.

’nuff said

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

  • Hi Ben, totally agree. Are we really so hopeless we can’t add enough value to milk powder that people will buy the value-add product?

    I don’t know enough about timber/milk et al to comment deeply, but I remember reading some years back that NZ ships wood to Japan, who then turns it into high quality paper, that they sell back to NZ, for much more than the raw wood. Huh?

    In some cases it may simply be that low cost workers produce these goods, and the manufacturing process will always be cheaper. If we do acknowledge this, then we need to be moving away from primary produce sectors towards our own value added sectors. Lets not be Ecuador, selling bananas and buying computers.

  • It’s the easy way out though. Perhaps it demonstrates a lack of belief in ones own people to do something special. NZ is playing the commodity game to the hilt and taking advantage of high prices for raw goods. To be fair so its Australia. They can’t get it out of the ground fast enough.

    But will it last? There’s nothing to stop NZ except a lack of self belief..oh and yes a lot of bureaucrats shining seats in Wellington 🙂

  • I’ve been avoiding posting about it too. But it cannot go unchallenged, especially in the context of the way China behaves as a global citizen.

    I’ve read a great deal about the FTA over the last week or so. Nobody really knows what the dollar benefits will be to NZ it seems. My assessment is that it will only make a relatively small net impact on the yawning trade deficit.

    For better or for worse we do need to have this FTA for some good strategic reasons however. Additionally, niche operators who export value added products such as functional foods and agricultural equipment, for example, could do well by leveraging the opportunity.

    Interesting to note that Norsewear just announced a $1 million sale of goods to China. I hope the wins keep coming, even after the hoop-la dies down.


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