A pivotal week for New Zealand exporters has brought both opportunity and uncertainty. On 1 November, the Government announced a ground-breaking free-trade deal with the Gulf Cooperation Council (GCC). Less than a week later, the United States presidential race outcome could affect trade with New Zealand’s third largest goods export market.

A new free-trade deal with the GCC

The GCC deal marks a significant milestone, opening greater access to six key Middle Eastern markets: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Over the next 10 years, 99% of New Zealand exports will gain duty free access, with 51% gaining immediate access. GCC countries collectively represent New Zealand’s seventh largest trading partner, with exports to the GCC worth $2.6 billion in the year to June 2024. Dairy and red meat account for 80% of that.

This deal, the GCC’s first with a major agricultural exporter, aligns with the Government’s plan to double export values within a decade. Its timing is particularly opportune, given that New Zealand may soon be facing tariffs of up to 20% on its exports to the United States.

Potential US tariffs 

President-elect Donald Trump pledged during his campaign to introduce tariffs on all foreign imports. If implemented, these tariffs would likely conflict with World Trade Organisation (WTO) core rules, which cap tariff limits and require equal treatment of all WTO members.

The stakes are high for New Zealand exporters, with goods exports to the United States worth $8.3 billion in the year ended March 2024. Key sectors include meat ($2.2 billion), dairy ($1.2 billion) and wine ($797 million). While tariffs could dampen demand, the projected stronger US dollar under a Trump presidency could cushion the impact on New Zealand exporters.

Global market implications

The effect of tariff imposition will extend beyond New Zealand. As the world’s second-largest beef importer and eighth-largest dairy importer, US tariffs could trigger global market reorganisation. While this could potentially create oversupply and price pressures, the United States is also the world’s fourth-largest beef exporter and fifth-largest dairy exporter. If other countries impose retaliatory tariffs on the United States, this could create new opportunities for New Zealand exporters. The European Union has announced an intention to hit back hard on new tariffs and has already prepared a list of goods for retaliatory tariffs.

While the GCC agreement represents a significant opportunity for New Zealand exporters, the global trade environment continues to evolve. We will continue to monitor developments and provide updates on developments that may affect New Zealand markets.