6 - Trade and Investment Overview: An ASEAN Perspective

Summary

Dr Jose L. Tongzon highlighted that his main objective was to look at the relationship between ASEAN and New Zealand from the economic perspective. He commenced his presentation by stating the trade relationship between New Zealand and ASEAN — there had been inconsistent growth in the trade relationship in the past ten years. The second part of his presentation dealt with this issue, the slow growth and obstacles to trade and investment between these two economies.

ASEAN-New Zealand trade relations have seen an inconsistent growth pattern from 1993 to 2004. Trade relations were significant since 1993 but stalled in 1997, when the Asian financial crisis took place. It has been inconsistent in the post Asian crisis period. For instance, exports to New Zealand fell during the Asian financial crisis, and also in 2001 and 2004. In contrast, ASEAN imports from New Zealand have grown significantly in 2003 and 2004. Another notable point is that exports from New Zealand were significantly higher than ASEAN exports to New Zealand. The bilateral trade remains insignificant, accounting for only 1 per cent of total ASEAN imports and exports.

Dr Tongzon explained that trade relations between the two countries were greatly affected by the following factors: firstly, the increase or change in commodity prices, especially from New Zealand; secondly, world demand had a impact on trade relations; and lastly, the appreciation of the New Zealand dollar. As the latter appreciates, there is an increase in trade between the two regions.

Different products in ASEAN and New Zealand dominate the composition of trade between the two regions. The composition of New Zealand exports to ASEAN is dominated by dairy products, fruits, vegetables, meat and food products. There is potential for export between New Zealand and ASEAN as a population boom is expected in the ASEAN countries. Additionally, as more people are becoming health conscious and there is insufficient domestic supply to keep up with the increase in demand, there is certainly scope for New Zealand exports in ASEAN.