Australia and New Zealand trade news: A miracle economy for 2024 and some solid gold news

Thu 11 Jan 2024
Posted by: Richard Cree
Trade News

Oz and NZ flags

A happy, bouncing economy and good news for the dairy industry – it’s (mostly) upbeat down under in the Daily Update’s round-up of the latest trade news from Australia and New Zealand.

Trade surplus

The new year has got off to a healthy start for the Australian economy, with the release of the latest trade statistics showing that the country reported a higher than anticipated trade surplus in November.

While its exports of commodities, particularly to fast-growing Asian economies, means it has recorded a surplus every month since 2018, the November surplus of AUS$11.4bn was beyond analysts’ expectations, which were closer to AUS$7bn.

The country’s strong natural resources, including iron ore and natural gas, have helped keep exports high, while in November there was an unexpectedly marked slump in the import of consumer goods.

According to Bloomberg (£), there was a marked increase in trade with Hong Kong and China (the biggest export market for many of its raw commodities), while some other markets, including India and Japan slipped.

Spanner in the works

One story that could upset all the good trade vibes is news that a dockers strike has extended nationwide, with The Loadstar reporting that DP World says operations in Brisbane, Fremantle, Melbourne and Sydney will be affected until 15 January.

The Maritime Union of Australia (MUA) is demanding a pay rise of over 27%, with the last round of talks in December breaking down without agreement.

The MUA wants the government to intervene, while industry body Shipping Australia has warned that the action is costing the economy AUS$84m a week.

Australian boom

Assuming it’s not derailed by the strike action, The Guardian reports that there is actually plenty of good news for the Australian economy, with the country on the verge of pulling off what it calls “a miracle” in 2024.

With its trade surplus built on exporting raw materials – for which demand appears to be strong – and importing consumer goods – demand for which has fallen as the recent rapid rise in interest rates takes effect – forecasts are for the country to have an enviable budget surplus.

This, combined with falling global inflation, means the Australian economy could be set to experience a year of decent growth, lower interest rates, lower inflation and a healthy fiscal position for the government. Hence the predicted “miracle”.

Trade deals on the horizon?

This miraculous boom could be helped further if a trade deal with the United Arab Emirates can be struck.

It’s a deal that Australian trade minister, Don Farrell, said last month was in his sights for 2024. The aim is to diversify away from that export reliance on China.

In the search for increasing exports to other markets, Australia is clearly out on the global stage looking for deals but remains prepared to walk away from negotiations when they don’t appear to be going its way.

Talks with the EU, for example, broke down last year over concerns about agricultural access.

According to the Economic Times, India is another country said to be on the verge of a deal with Australia, although the paper claims that negotiations on a comprehensive trade deal won’t get started until after the Indian general election.

An Economic Trade and Cooperation Agreement between the two countries has been in place since December 2022.

There’s gold on that farm

RNZ reports that Australian-listed Santana Minerals has issued an investor prospectus for a site it says contains the “most significant single gold discovery in New Zealand” in 40 years.

The Rise and Shine site is estimated to be capable of yielding between 100,000 and 150,000 ounces of gold a year, which at current prices equates to at least NZ$325m.

China’s oldest free trade agreement

New Zealand’s dairy sector is reported to be delighted that China has dropped “safeguard duties” on powdered milk, meaning that all dairy products from New Zealand are now able to enter China without tariffs.

The duties date way back to a 2008 free trade agreement, the first between China and a developed nation.

At the time, dairy products were subject to long tariff phase-outs, with  powdered milk’s only expiring on 31 December 2023.

Dairy exports from New Zealand to China, its biggest trade market, have been worth an average of NZ$8bn over the last three years.

Green party MP “steps aside” over shoplifting allegations

Political gossip in New Zealand has been focused on Green Party MP Golriz Ghahraman.

Ghahraman was the party’s spokesperson on justice, trade and foreign affairs and has “stepped aside” from her portfolios as police investigate allegations of shoplifting from high-end Auckland clothing store Scotties Boutique.

Ghahraman has not yet spoken in public about the allegation, with the media reporting that the store has also declined to comment.

CPTPP consultation

While we’re in the Pacific region, it’s also worth noting that the Department for Business and Trade is seeking views from businesses, individuals and other interested stakeholders on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Those interested in contributing to the CPTPP General Review can find the form here.