|dc.description.abstract||New Zealand's dependence on the traditional exports, meat, wool, butter and cheese for the major overseas earners is well documented, (see (1)). New Zealand is one of the world's most efficient producers of these commodities but market access and short term political and social expediency has tended to reduce the gains of economic rationalization. During the last year (1971) butter and cheese have been placed in long term jeopardy due to Britain's impending union1
This is not an unexpected development. Britain first applied for membership in 1961 and was rejected in 1963 - negotation restarted in 1966 and entry will date from the 1/1/73. However, the provisions of the Common Agricultural Policy will not come into force until 1/1/74.
with the European Economic Community. Wool suffered a serious price reversal in 1967 and although a price revival has occurred in the past year it is doubtful if this will be a long term recovery. Lamb exports to the U.K. are experiencing greater competition than ever from other meats, especially cheaply produced poultry. The beef quota for the U.S.A. cannot be considered safe as it depends to a large extent on seasonal production variations in the U.S.A. and the strength of the U.S.A. farm lobby. The existence of tariff and non-tariff barriers to trade, together with low price and income elasticities of demand for primary exports has placed emphasis on manufactured exports and import substitution in New Zealand, but many attempts at such diversification are often misdirected.2
2.An obvious example of this in New Zealand - The Automobile Industry. (see The World Bank Report on the New Zealand Economy 1968) though the farming industry has some protected sectors also. New Zealand has no absolute or comparative advantage in citrus production, hop production, wheat production - consequently all are protected by trade barriers in common with many other countries.
Condliffe (5) has a cautionary note about this: "It is necessary to aim at competitive production for the world market rather than protected production for a small local market."||en_US