New Zealand’s place in the world – including flows in trade, people, capital, and ideas – continues to change. This discussion paper highlights how some of the long-standing memes, which have dominated the local discourse no longer apply in a post-COVID world. In particular, New Zealand’s openness to external trade and foreign investment, and the role of migration in driving population growth have all changed.
- Openness – New Zealand is much less open to trade in goods and services than other small, developed economies – geographic distance results in overall openness (exports and imports combined relative to GDP) at 50 percent, which is low compared to 80 percent for a sample of small, advanced European economies.
- Services – The economy is becoming increasingly a services-driven economy – with direct exports of services (tourism in particular) doubling over the last 20 years while indirect services embodied in other exports make up another 27 percent.
- Agriculture – The shares of employment and economic activity in this sector are small but agricultural exports of raw and processed material still dominate overall good exports with a 90 percent share