Maureen Benson Rea
Maureen is an Associate Professor in the Department of Management and International Business. Her research focuses on business networks, small firm internationalisation, cooperative business strategies and European business and trade.
The future looks bright for free trade with the EU, even after Brexit
New Zealand was fortunate to be the first country that negotiated a free trade agreement (FTA) with China in 2008, says Associate Professor Maureen Benson-Rea. However, there has been such an emphasis on the Chinese market since then, particularly by larger New Zealand companies, that the opportunities in other markets have been somewhat overlooked.
The lion’s share of our exports to China are commodities such as dairy products, logs and meat. The European market, currently our third largest export partner after China and Australia, also takes commodities like meat, dairy, fruit and wine, but it has a strong interest in more sophisticated, value-added exports as well. Despite our size, we have a lot to offer the EU – innovation, flexibility, and a “can do” attitude towards business. We also have strong links to value chains in the Asia-Pacific region and the United States which we can offer and build with other international business partners.
Add to all that our historical ties, similar values and ways of doing business, and the future of NZ-EU trade looks very bright indeed, Maureen believes. Since 2015, she and her research partner Dr Peter Zamborsky have been researching the benefits and issues associated with a NZ-EU FTA, which is now under negotiation between Wellington and Brussels. Looking at the interface between business interactions, trade policy and market dynamics, they seek to answer some fundamental questions:
- How will a NZ-EU FTA increase the competitiveness of both New Zealand and European companies?
- How will partnerships and collaborations be affected by trade policy?
- How can knowledge and innovation links help to build positions for NZ and EU companies (including SMEs) in global value chains?
- And how will Brexit affect the NZ-EU FTA?
The answer to this last question is unknown at the time of writing. But New Zealand companies realise that advance planning is crucial to ensure our products don’t just “sit on the dock” in European markets. We still have tariff quotas on some of our goods exports to the EU (our total exports, including services, to the EU were $8.6 billion in 2017). If/when the UK leaves the EU, those quotas will be split between the EU and the UK. So New Zealand will have, in effect, a “dollar each way”: an FTA with the EU27, and a yet-to-be-negotiated separate trade agreement with the UK.
In addition, we have longstanding, stable, value-creating and trusting business relationships in both markets, but especially in the UK, where our relationship may be even more highly valued after Brexit.