New Zealand and Latin America: Update on the trade relationships, barriers, and opportunties
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Te Herenga Waka—Victoria University of Wellington
Abstract
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The New Zealand-Latin America trade relationship is presently relatively small, but trade has been growing steadily outside of one-off events like Venezuela’s economic collapse. Goods exports to Latin America, excluding Venezuela, grew 29% between 2010 and 2019. and have been largely resilient through the pandemic.
Goods exports to Latin America have traditionally been dominated by dairy products, but other sectors are showing promising growth, including medical equipment and agricultural machinery. Dairy will likely continue to be central to a growing trade relationship, opening up opportunities for related sectors such as agri-tech.
Imports from Latin America are diverse, from primary products to advanced manufacturing, and have grown rapidly.
As with all New Zealand trade partners, services trade with Latin America has taken a hit as a result of the pandemic as tourism and export education dropped away. This will likely bounce back as borders reopen.
There are a number of examples of bilateral investment between Latin America and New Zealand. This includes New Zealand companies manufacturing in Mexico in order to access to the wider North American market. Outside of these examples, data indicates that total stocks and flows of investment are generally low. Should the economic relationship with Latin America thicken over time, we might expect investment trends to follow.
Keywords
Latin America, New Zealand, Trade relationships