The evolving NZ-US trade relationship : selected case studies - NZIER working paper 2011/1

15 March 2011

NZIER contributes to book that outlines ways to enhance the U.S. – New Zealand relationship


The bilateral relationship between New Zealand and the U.S. has never been in such good shape. The Trans-Pacific Partnership trade agreement currently under negotiation presents a further opportunity to deepen links between New Zealand and U.S. businesses, and to enhance the broader bilateral relationship.

A recently-released book, titled Pacific Partners – The future of U.S.-New Zealand Relations, looks at the relationship between New Zealand and the U.S. across five areas: political and security cooperation; trade and investment relations; science and technology cooperation, educational and cultural linkages; and cooperation on transnational issues.

The book was produced by the Centre for Strategic and International Studies (CSIS) in Washington DC and the New Zealand Institute of International Affairs (NZIIA) in Wellington.  It was formally launched at the United States-New Zealand Partnership Forum in Christchurch on 21 February 2011.

The key conclusion of the book is that now is the time to move the relationship to a higher level of engagement. It provides 32 specific recommendations as to how this could happen.

The full report can be downloaded here: http://csis.org/files/publication/110211_Bower_PacficPartners_web.pdf.

NZIER contributed the trade and investment chapter of the book. We drew on statistics and interviews with firms to highlight that:

  • The bilateral relationship has evolved beyond trade in primary and bulk manufactured goods
  • Niche manufacturing, services trade, environmental and agricultural technology exchange, investment flows, and movement of people are now much more common
  • U.S. businesses and government agencies benefit from using New Zealand goods and services to improve their productivity, and U.S. consumers are enjoying the safe, sustainable products that New Zealand makes and exports.
  • New Zealand firms benefit from the scale of the U.S. market, and U.S. investment in New Zealand supports innovation and capital deepening.
  • There are substantial opportunities for New Zealand and the U.S. to work together to open up new markets in the fast-growing Asian region.
  • Concluding negotiations on the Trans-Pacific Partnership trade agreement, and then seeking to expand it to include Japan, Korea and other Asia-Pacific economies, will deliver benefits to both countries.

The chapter concludes with five recommendations about how to build better links between New Zealand and U.S. firms:

  1. Conclude a high-quality Trans-Pacific Partnership (TPP) trade agreement as soon as possible.
  2. Create a joint United States–New Zealand Eminent Persons Group (EPG), including the leaders of the United States–New Zealand and New Zealand–United States Councils, to further explore smart partnerships.
  3. Initiate congressional/parliamentary visits aimed at deepening understanding of the opportunity to expand trade and leverage commercial relationships.
  4. Develop a series of economic dialogues with the Asia-Pacific countries most likely to be interested in, and able to join, the TPP.
  5. Identify areas of common interest and jointly promote those positions in key regional trade and investment forums such as the TPP, APEC, Closer Economic Partnership for East Asia (CEPEA), and the East Asia Summit (EAS).

The case studies that lay behind the trade and investment chapter have now been published as NZIER working paper 2011/1. These case studies were developed to inform and illustrate the conceptual ideas presented in the chapter, and to provide real world examples of how New Zealand and U.S. firms are working together for mutual benefit.

For any questions on the trade and investment chapter and the accompanying case studies, please contact John Ballingall on 04 470 1804 or john.ballingall@nzier.org.nz.