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New Zealand Economic and Financial Overview 2016

Foreign Relations and External Trade

New Zealand foreign policy seeks to influence the international environment to promote New Zealand's interests and values, and to contribute to a stable, peaceful and prosperous world. In seeking to make its voice heard abroad, New Zealand aims to advance and protect both its security and prosperity interests.

Trade is essential to New Zealand's economic prosperity. Exports of goods and services make up around 30% of gross domestic product (GDP) and New Zealand's trade interests are well diversified. Australia, China, North America, the European Union and the Association of South-East Asian Nations each take between around 9% and 19% of New Zealand's goods and services exports. Other major trading partners include Japan and the Republic of Korea.

Asia-Pacific regional linkages remain at the core of New Zealand's political and economic interests. The countries of Asia-Pacific Economic Cooperation (APEC) take more than 70% of New Zealand's exports, provide 71% of tourism arrivals and account for around 75% of New Zealand's foreign direct investment. However, New Zealand's trade policy still has strong links into Europe, and successive governments have also pursued opportunities in emerging regions, such as in the Middle East and Latin America.

While New Zealand exports a broad range of products, it remains reliant on exports of commodity-based products as a main source of export receipts and relies on imports of raw materials and capital equipment for industry.

New Zealand is committed to a multi-track trade policy which includes the following measures:

  • multilateral trade liberalisation through the World Trade Organisation (WTO)
  • regional cooperation and liberalisation through active membership of such fora as the APEC and the East Asian Summit, and
  • bilateral and plurilateral trade arrangements, such as:
  • the Closer Economic Relations (CER) Agreement with Australia (in force since 1983)
  • the Trans-Pacific Partnership (TPP) Agreement, a free trade agreement concluded in 2015 aiming to liberalise trade and investment between 12 Pacific-rim countries: New Zealand, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore, the United States and Vietnam
  • free trade agreements with Singapore, Thailand, Malaysia, Hong Kong and Republic of Korea and the economic cooperation agreement with Chinese Taipei
  • the ASEAN-Australia-New Zealand Free Trade Agreement, and
  • ongoing processes and negotiations with several parties on future Free Trade Agreements, including: the Gulf Cooperation Council (GCC); India; with ASEAN, China, India, Republic of Korea, Japan and Australia in the context of the Regional Comprehensive Economic Partnership (RCEP); and most recently the agreement with the European Union to seek negotiating mandates.

At home and abroad, New Zealand remains committed to a reduction of trade barriers. Domestically, tariffs have been systematically reduced and quantitative controls on imported goods eliminated. Around 90% of goods come into New Zealand tariff free, including all goods from Least Developed Countries. Internationally, New Zealand was active in laying the foundations for the Doha round of WTO negotiations and has been an active participant.

Regionally, New Zealand, as a member of APEC, is committed to achieving APEC's goals of free trade and investment in the region. To this end it is contributing to ongoing discussions around a Free Trade Agreement of the Asia Pacific (FTAAP).

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