New Zealand exporters are faring quite well despite turbulence in world trade. Photo \/ File<\/p>\n
Trade expert Stephen Jacobi says New Zealand exporters - aided by strong demand from China - have held up well despite a \"messy\" world trade environment.<\/p>\n
Jacobi, speaking at a presentation put on by the newly listed trade software specialist, Trade Window, gave a rundown on the current state of play with global trade. <\/p>\n
\"What can I say it's messy out there,\" Jacobi, executive director of the NZ International Business Forum, said.<\/p>\n
\"Exporters are today facing unprecedented challenges in getting their products to market and into the hands of discerning consumers who want them.<\/p>\n
\"The global economy is in a funk.<\/p>\n
\"The pandemic is by no means over, there is war in Europe - who would have thought we would be using that phrase in the 21st century - global markets are disrupted by supply chain bottlenecks, inflation is taking its toll on the global economy and people around the world are hungry.<\/p>\n
\"We have [Russian President Vladimir] Putin's abominable invasion of Ukraine to blame for this even before the global economy has recovered from the pandemic, the war has ruined any chances of an early recovery.\"<\/p>\n
In July the International Monetary Fund (IMF) released what it described as a \"gloomy and uncertain forecast\".<\/p>\n
The IMF said world growth was expected to slow from an estimated 6.1 per cent last year to 3.2 per cent in 2022 and 2.9 per cent in 2023.<\/p>\n
Last October, the IMF was forecasting growth for 2022 of 4.9 per cent.<\/p>\n
Global trade had dropped by 5 per cent in 2020 but had grown by 9.8 per cent last year.<\/p>\n
Now the World Trade Organisation was forecasting growth of 3 per cent because of the war.<\/p>\n
\"Against this backdrop, New Zealand's exports have held up remarkably well, at least in terms of value. Exports were up 6 per cent last year but trade volumes have been slipping.<\/p>\n
\"Both exports and imports remain hampered by bottlenecks at our ports and an exponential rise in shipping rates which makes getting products to and from market exceptionally difficult and expensive.\"<\/p>\n
He said thankfully, exports to China were up 21 per cent by value last year and still growing despite the economic slowdown and continuing lockdowns in that country.<\/p>\n
\"That growth, and China's increasing assertiveness on the world stage, is causing some, especially in Government, to question whether we are over-dependent on China and should seek to diversify.<\/p>\n
\"That's a fair enough question to ask, but it probably has as much if not more to do with geopolitics than economics.<\/p>\n
\"Clearly in a highly contested and unstable global environment the political risks of doing business around the world are growing and exporters need to keep a watchful eye on this and look especially to consolidate their relationships in key markets.\"<\/p>\n
Jacobi said trade diversification was \"a lot easier to talk about than do\".<\/p>\n
Much would depend on the availability of alternative markets, with market access a particular problem for New Zealand.<\/p>\n
The recent free trade agreement with the UK was a case in point.<\/p>\n
\"It is undoubtedly one of the best we have concluded, giving significant new market access for all goods and services of export interest,\" Jacobi said.<\/p>\n
The recently concluded NZ-EU free trade agreement (FTA) gave new access for a range of products but not at all for dairy and meat, New Zealand's two biggest export sectors.<\/p>\n
Jacobi said neither FTA would replace China \"it is simply a question of market demand\".<\/p>\n
\"FTAs remain important, but we need to look at other instruments to fuel our export drive.\"<\/p>\n
Jacobi said digital technology was transforming economies and had the capacity to speed the movement of goods through supply chains, reduce costs and promote the development of a new \"weight-less\" economy through new digitally delivered services.<\/p>\n
New Zealand and Australia were investing in arrangements to provide a new architecture for digital trade New Zealand through the Digital Economy Partnership Agreement (Depa), which was attracting new interest around the region.<\/p>\n
Software tech startup Trade Window was listed on the NZX last November at a 25 per cent premium, giving it a market capitalisation of $99m.<\/p>\n
On debut, the company, which provides digital solutions for exporters, importers, freight forwarders and customs brokers, increased its share price trade to $1.15, up from its 92c reference price.<\/p>\n
Trade Window traded on the NZX today at 68c.<\/p>\n
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Stephen Jacobi on world trade: 'It's messy out there' - New Zealand Herald<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" New Zealand exporters are faring quite well despite turbulence in world trade. Continue reading