Exporters hit by import barriers

The government is being urged not to think of "imports" as a dirty word.

The newly released OECD-WTO ‘trade in value-added’ measure shows about a third of New Zealand’s imports of intermediate inputs is used to produce goods and services which are then exported.

Agriculture and food products use the biggest share, nearly 50%, of imported intermediate inputs.

The research also shows the value of the service sector to exporting has been under-estimated. Services represent 46% of the value of New Zealand’s exports when you take into account services contribute a significant share to the value added in manufacturing exports.

New Zealand Chambers of Commerce director Michael Barnett says government policy needs to focus as much on achieving high-quality outcomes in non-agricultural goods and services as it does on agriculture.

He says imports are an important component of business and exports.

“Imports should not be seen as a dirty word. Import barriers are just another cost to internationally focused New Zealand businesses.”

He says government trade policy needs to recognise the internationalisation of New Zealand business is not just about increasing exports but is about increasing international activity generally.

“This means increasing two-way trade as well as cross border investment and migration.”

Trade minister Tim Groser has welcomed the new estimates and agrees any barriers to imports are now barriers to exporting.

“Countries must ensure their businesses can access world class inputs at competitive prices if they are to be productive and reap the benefits from global trade and value chains.”

The OECD estimates show 81% of New Zealand exports’ value is created domestically. This is higher than the OECD average of 72%.

Mr Groser says this reflects New Zealand’s geographic distance and the importance of agricultural products to the country’s exports.

The research also shows the US has become New Zealand’s leading importer on a value added basis, ahead of Australia, which remains its main importer in gross terms.

It also shows New Zealand’s trade deficit is smaller with China, the US and Germany in value-added terms than in gross terms, and its trade surplus with Australia is also smaller.

Mr Groser is currently a contender for the director-general’s job at the WTO.

bcunningham@nbr.co.nz