New Zealand export activity is reaching further afield, as the country establishes greater trade relationships with Latin American nations. Though diplomatic relations with countries such as Mexico and Peru extend back decades and even centuries, there’s still a great deal of trade potential between these 3 countries.
Now, following the signing of the historic Comprehensive and Progressive Trans-Pacific Partnership with 10 other countries, New Zealand opens up new export opportunities and unprecedented access to Mexico and Peru markets.
New Zealand export opportunities: focus on ‘emerging consumers’
The country’s trade agency, New Zealand Trade and Enterprise (NZTE), held a seminar in September 2019 to discuss trade opportunities for New Zealand export hopefuls in Mexico and Peru, two of the nation’s largest consumer markets in Latin America.
The seminar expressed that New Zealand’s two-way trade with Mexico reaches nearly NZ$800 million per year, and that Peru is the country’s third-largest trading partner in Latin America. As Peru and Mexico’s economies continue to develop at a rapid pace, both remain open to accept further New Zealand export offerings.
Exporting wine to Mexico
Beer and tequila are the main stars of Mexico’s alcoholic beverages industry, presenting an opportunity for New Zealand wine exports to enter the fore.
Market research conducted by NZTE suggests that despite the AMLO (Andrés Manual López Obrador) government’s interest in supporting local business and locally made goods, the country houses a curious consumer demographic that demands new products and options.
Other market observers suggest that Mexico houses one of the biggest luxury consumer markets in the region, which New Zealand wines could certainly appeal to. A growing middle class and strong tourism sector place the country well to receive quality New Zealand exports of reds, whites and rosés.
Technology adoption in Peru
Peru’s economy has experienced around 2 decades of consistently positive growth. Its government has a strong agenda to continue driving technology and innovation into Peru’s high-performing sectors. This will improve Peru’s technological sophistication and global competitiveness, and attract new investment into the country.
Peruvian banks are making commitments to work alongside fintech start-ups to make their services more accessible and modernize the country’s financial services sector.
Perhaps more viable for New Zealand exporters, however, is Peru’s burgeoning agricultural technology industry. In 2015, the government pledged a 5-year investment of more than US$177 million into agritech development between 2015-2019. Agriculture remains one of Peru’s most powerful revenue generators, and implement efficient, sustainable, and technologically sophisticated agricultural practices is of high important to the country.
New Zealand excels in agritech development, and its products in this industry would be warmly welcomed in the Peruvian market. The New Zealand ‘brand’ is highly regarded in the Latin American country, and various achievements in agribusiness would make these New Zealand exports a hot commodity.
During the NZTE seminar for New Zealand export opportunities, Nathan Farmer, partner of Big Picture was quick to identify that despite Mexico’s immense population of around 130 million people, “six percent live below the poverty line and 60 percent live on less than US$600 a month.”
Alongside focusing on the “niche, emerging consumer” of growing financial means and diversifying tastes, there are also significant business-to-business (B2B) opportunities for New Zealand exports in Mexico. Successful businesses in the country presumably have that same, diversifying consumer market to contend with, plus the means to make large-scale orders from New Zealand exporters. A developing technological landscape means a growing tech-literacy and demand for online marketplaces among businesses and consumers alike.
New Zealand export behavior and relations with Mexico and Peru
New Zealand established diplomatic relations with Peru in 1972, while its relationship with Mexico goes further back in time, when New Zealand was still a part of the British Empire. Mexico is now New Zealand’s largest trading partner in Latin America.
Key New Zealand exports to these two powerhouses include:
|Key New Zealand exports to Peru||Key New Zealand exports to Mexico|
Butter and dairy spreads
One crucial trade agreement signed by all 3 parties that shows promise for their trading future is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This agreement, signed in March 2018, is the first time New Zealand will gain preferential access to Mexico and Peru’s markets. Though not yet ratified by Peru, the agreement promises the eventual elimination of tariffs on New Zealand exports to all CPTPP economies, including these Latin American traders. Chile is also a signatory to the agreement.
Additionally, New Zealand is seeking associate member status with the Pacific Alliance, another powerful trade bloc comprised of Mexico, Peru, Chile and Colombia. Once achieved, this unlocks greater access for New Zealand traders to 4 of the largest economies in Latin America.
Tips for New Zealand exporters
Advice for New Zealand-based businesses looking to export to Mexico and Peru from the NZTE seminar included gaining an awareness of local business etiquette. Building relationships and showing a physical presence in the region is highly valued by potential business partners, clients and contacts.
Speakers at the NZTE seminar reminded businesses to target and connect with decision-makers, and brace themselves for a more indirect method of communication, where ‘yes’ may not always mean ‘yes’ when it comes to making sales.
It’s important to have a clear market entry strategy and invest time into cultivating strong networks and partnerships in the region, and also carve out the niche consumer market in these countries’ collective population of over 160 million people.
Biz Latin Hub supports New Zealand export activity in Latin America
There are many traditional and emerging opportunities to increase New Zealand’s export levels with Latin America through its key trading partners in the region. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership generates great potential for strengthened trading relations and cooperation between New Zealand, Peru and Mexico.
Businesses operating out of New Zealand looking for their next export opportunity in Mexico and Peru must bear in mind that they’ll need the assistance of a trusted local customs agent and trade law expert to support them in their venture. At Biz Latin Hub, our well-established Lima and Peru offices guide exporters through the countries’ regulatory steps to export into their markets.
Contact us today to find out more about how we can support you.
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