Global Economic and Trade Update for New Zealand Businesses - 13 November 2020

Feedback

We welcome feedback from New Zealand exporters on this report as we continue to refine its content. We also invite requests for reporting from New Zealand’s network of Embassies and High Commissions. Please direct any suggestions or feedback to exports@mfat.net.

Domestic Update

Several businesses continue to report sea freight import and export delays. Ports are reporting an average of 7-10 day delays on incoming shipments due to congestion at key feeder ports in Australia, Singapore and Hong Kong. Intermittent industrial action at Australian Ports, the onset of peak import season in New Zealand, as well as trade activity deferred by COVID-19 shut downs, are also contributing factors. This has flow on impacts on New Zealand exports that rely on these delayed ships, and their empty containers, to export goods offshore. Ports of Auckland is particularly affected, with some vessels redirected to Tauranga. The Ministry of Transport, in conjunction with other agencies including MFAT, continues to monitor this problem and assess possible mitigations.

On 30 October, the Minister of Health announced mandatory testing for all replacement maritime crew arriving in New Zealand, regardless of the time spent in transit. This decision was based on interagency advice aimed at reducing the risk of COVID-19 transmission at the border, following the recent positive cases at the ports. Additional measures to strengthen health and safety measures at the maritime border are being actively explored and considered by key agencies.

Regional updates

Pacific

Niue has formally announced(external link) its self-isolation trial for inbound passengers, which commenced this week. Passengers must get two clear COVID-19 tests, submit a security management plan, and secure Cabinet approval before being allowed to self-isolate.

Asia

As of 7 November, Chinese authorities have implemented new pre-departure travel requirements for all travel to Mainland China. Under the new policy all passengers travelling to China from New Zealand must have two COVID-19 tests in the two days prior to departure. Test results must be obtained and submitted to the Chinese embassy or consulate for approval to travel.

Two new COVID cases in the port city of Tianjin are reported in the media as linked to a local cold-chain facility that handled imported frozen pork from Germany. A number of provincial authorities have tightened distribution and testing procedures for imported cold chain food products.

With no lockdown imposed and strong export demand for information and communications technology parts and components, Taiwan’s economy has fared much better than initially predicted for the first three quarters of 2020. The IMF revised its 2020 real GDP growth rate prediction of -4% in April to 0% in October. Quarter 3 advanced estimates of GDP growth released on Friday 30th October showed Taiwan’s economy grew by 3.33% on a year-on-year basis. Strong global demand for electronic products, as well as information, communication and audio-video products were a driver for this growth. 

COVID-19 has had a mixed impact on NZ businesses in Korea but total two-way trade (goods and services) remains stable at around $5 billion NZD (year ending June 30). The Korean economy, supported by government spending and a bounce-back by exports, grew by 1.9% in the third quarter – reinforcing its status as the least affected economy in the OECD. New Zealand’s surplus in service exports to Korea is expected to disappear this year due to COVID’s impact on the tourism and education sectors. Goods exports, however, have held up remarkably well - up 10% in the year ending September 2020. COVID has seen a surge in online retail sales with significant growth in food, beverages, and health supplements. In particular, there have been increases in the sales of dairy (up 16%), meat (up 18%), kiwifruit (up 15%), and wine (up 25%).

Europe

Negotiations between the European Union (EU) and the United Kingdom (UK) are continuing in London this week, ahead of the end of the Brexit transition period on 1 January. Big challenges reportedly remain, notably on access to UK fishing waters by European fishing vessels and on the “level playing field” (state aid). Further progress will be required in the coming weeks; if talks were to continue into December, it would pose challenges in terms of ratification procedures in both the UK and EU (notably for the EU Parliament).

The UK’s transition period from the EU will end on 31 December 2020, when it will leave the EU customs and single market. Information about how Brexit may affect New Zealanders, including exporters, can be found here.

Americas

On 30 October, the US Food and Drug Administration (FDA) published a list(external link) of ‘Essential Medicines, Medical Countermeasures, and Critical Inputs’ as directed by the Executive Order(external link) on Ensuring Essential Medicines, Medical Countermeasures, and Critical Inputs Are Made in the United States. The FDA list includes 223 essential medicines and medical countermeasures and their critical inputs as well as 96 medical devices (including diagnostic testing kits, personal protective equipment, vital sign monitoring devices, vaccine delivery devices and ventilators and other devices for management of acute illnesses). New Zealand businesses that export medical goods to US that are included on the list and may be impacted.

US Trade Representative Robert Lighthizer has asked the US International Trade Commission in a letter dated 3 November to monitor and investigate imports of strawberries and bell peppers in response to long-standing concerns from local growers alleging unfair imports from Mexico.

Following the Argentine government’s decision to temporarily reduce export duties on soya and its by-products, export declarations for close to 3.45 million tonnes of soybean complex products worth US$1.8 billion have been registered up to December 2020, which are expected to generate around 42 billion pesos (US$529 million) in export taxes

Market reports released this week

An Italy economic update was prepared by the New Zealand Embassy in Rome.

Last week’s global economic and trade update can be found here.

External links

The following links may provide useful information to businesses:

  • NZTE(external link) has a website focused on providing COVID-19 information for exporters. They’ve also launched myNZTE(external link), an interactive digital portal of insights and tools available to all New Zealand exporters.
  • The Treasury releases a weekly COVID-19 economic dashboard(external link), and Stats NZ has published a new data portal(external link) with near real-time economic indicators.
  • MBIE publishes a sector reports series(external link) which provides regularly updated reports on all industry sectors that make up the New Zealand economy. These include official economic data and the challenges and opportunities that face New Zealand’s industry sectors.
  • Business.govt.nz(external link) provides tools and advice from across government to save small businesses’ time and help make the business a success.
  • MFAT has created a tariff finder(external link) which is designed to help goods exporters and importers maximise benefits from New Zealand’s Free Trade Agreements and compare tariffs in 136 other markets.

To contact our Export Helpdesk

Disclaimer

This information released in this report aligns with the provisions of the Official Information Act 1982. The opinions and analysis expressed in this report are the author’s own and do not necessarily reflect the views or official policy position of the New Zealand Government. The Ministry of Foreign Affairs and Trade and the New Zealand Government take no responsibility for the accuracy of this report. 

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