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 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.

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.

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.

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?

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 for processing.

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.