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National Centre for Research on Europe
The effects of EU Enlargement on New
Zealand: A Preliminary Assessment.
By Matthew Gibbons
Past Expansions: costs in the 1970s
•Loss of access to the UK market.•Depressed world prices for agricultural products.
Past Expansions: benefits in the 1970s•Diversifying markets and products beneficial for NZ.•Declining sales in UK before 1973.•UK argued for CAP reform.•EU expansion increased opportunities elsewhere in the EU for NZ.•End of tariff preferences for the UK made cheaper imports from other countries possible.
Figure 1: NZ's exports to the EU-15 in 2002 dollars
0
1
2
3
4
5
6
7
8
Years
Billi
ons
of d
olla
rs in
200
2 va
lues
EU-15
United Kingdom
EU-15 excluding UK
January 1993, single market begins
January 1973, UK joins EEC
New Zealand's exports to the EU-15 countries in 2002
0
200
400
600
800
1000
1200
1400
1600
Exports
Hun
dred
s of
mill
ions
Figure 3: New Zealand's imports from EU-15 countries in 2002 dollars
0
1
2
3
4
5
6
7
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
Years
Bill
ions
of
dolla
rs in
200
2 va
lues
EU-15
United Kingdom
EU-15 excluding UK
January 1973, UK joins EEC
January 1993, single market begins
New Zealand’s trade with the new EU members•Exports have included wool, hides, frozen meat, dairy products.•Historically exports have been small per capita, with the exceptions of Cyprus and Malta.•Imports include machinery and electrical equipment.
Exports to the new EU members in millions of 2002 dollars
0
50
100
150
200
250
300
350
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
Years
Mil
lio
ns
of
do
llar
s in
200
2 va
lues
Total new EU
Poland
New Zealand's exports to the new EU members in 2002
0
10
20
30
40
50
60
Slovakia Slovenia Hungary Estonia Lithuania Czech R Poland Malta Cyprus Latvia
Countries
Mill
ions
of d
olla
rs
Figure 6: New Zealand's imports from the new EU members in 2002 dollars
0
20
40
60
80
100
120
140
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
Years
Val
ue o
f im
port
s in
200
2 do
llars
Total new EU
CzechoslovakiaCzech R
October 1975, New Zealand economic mision to Eastern Europe
Economic significance of the new members
• Increase EU’s GDP by 8%, population by 17%.
• Can be expected to catch up with existing EU members over time.
• Some are at similar income levels to New Zealand.
Figure 9: GDP per capita of the new EU members and of New Zealand
0
5000
10000
15000
20000
25000
Countries
GD
P/c
apit
a in
$U
S (
PP
P)
Opportunities for agricultural products
• EU’s agricultural production up.• Proportion of workforce in agriculture and
dependence on CAP up.• However, CAP reform has been prompted
by the expansion of the EU.• New members mainly produce cereals
(wheat, rye).• When they do produce the same goods as
NZ quality and food hygiene is often poor.
• Dairying - Poland is a long-term potential threat.
• Beef – Potential for growth in NZ’s exports.
• Sheep meat – Little is consumed.• Fruit and vegetables, fish, venison,
beverages – More consumed as countries become richer.
• Agri-tech – Possibilities exist. • Tourism – no direct airlinks.
Opportunities for imports
• New Zealand is currently upgrading its infrastructure.
• Possibilities include railway and electrical equipment.
Need to deepen relationship
•Danger of being ignored and/or overlooked.•Links with Poland (WWII), Hungary (refugees), Cyprus and Malta (Commonwealth members).•Relationships with other new EU members are weaker.•Perception only interested in agriculture, work only through the UK, EU gains little from relationship.
• Diplomatic issues
• Where to place embassies and diplomats –Poland, Slovenia, Austria, Belgium, or France?
Total number of articles per month about EU enlargement in NZ newspapers using a 3 month moving average
0
2
4
6
8
10
12
14
16
18
Months
Num
ber
of a
rtic
les
abou
t EU
enl
arge
men
t
Number of articles
Current Research
1. Diversification of exports
2. Survey of exporters to the EU
3. Dairying and meat exports
4. EU and NZ’s infrastructure.
1. Diversification of exports
• Holmes and Pearson (1991) predicted that “expanding markets will be available in Europe for a wide range of primary products, manufactures and services”. This article examines how much New Zealand’s trade with the EU has diversified since they made this statement.
• Got export data 1991-2004 for processing.
N Z's exports of beverages and alcohol to the EU-25 in 2004 values
0
20
40
60
80
100
120
140
160
180
200
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Years
Exp
ort
s in
mill
ion
s
Beverage and alcohol exports
NZ's fruit and vegetable exports to the EU-25 in 2004 values
0
50
100
150
200
250
300
350
400
450
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Years
Exp
orts
in m
illio
ns
Fruit and vegetable exports
NZ's exports of dairy products to the EU-25 in 2004 values
0
100
200
300
400
500
600
700
800
900
1000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Years
Exp
orts
in m
illio
ns Dairy exports
NZ's exports of wool to the EU-25 in 2004 values
0
100
200
300
400
500
600
700
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Years
Mill
ion
s o
f d
olla
rs
Value of wool exports
2. Survey of exporters to the EU
• Currently I am drawing the questionnaire up.
• Questions on experiences in EU-15 and plans for new EU members.
• If you have questions you particularly want asked let me know.
Conclusion
• Past enlargements have had both positive and negative effects for NZ.
• Effects of current EU enlargement are likely to be relatively positive for NZ.
• Opportunities exist.
