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New Zealand aims to triple trade with Thailand over two decades as South East Asia’s middle class grows

Economy / news
New Zealand aims to triple trade with Thailand over two decades as South East Asia’s middle class grows
New Zealand's self-described 'Salesman-In-Chief' tours Bangkok in an electric tuk tuk
New Zealand's self-described 'Salesman-In-Chief' tours Bangkok in an electric tuk tuk

Prime Ministers Christopher Luxon and Srettha Thavisin have agreed to target tripling two way trade between New Zealand and Thailand over the next two decades. 

This was described as an “ambitious” goal in a joint statement released by the two leaders after their bilateral meeting on Thursday, but would only be a repeat of the past.

Trade between the two countries has already tripled in the 20 years that have passed since a free trade agreement was signed in 2005. That required an annual growth rate of 5.7%. 

By contrast, the National Party campaigned in last year's election on doubling New Zealand’s exports over the next 10 years, which would require an annual growth rate of 7.2%.

Total bilateral trade was $4.5 billion in 2023, so Luxon and Thavisin would be aiming for $13.5 billion in 2045. Inflation at 2% would bring trade value to $7 billion, without any growth at all.

So, the target boils down to something like a $6.4 billion boost in trade over the next two decades, which could be achieved with actual volume growth of less than 3% each year.

John Ballingall, a trade expert at Sense Partners, said tripling trade was a nice diplomatic sound bite but was “largely meaningless economically”.

“More importantly, who’s going to be around politically in 20 years to check,” he said. 

Thai economist Watcharas Leelawath told a panel that trade between New Zealand and Thailand only made up a tiny fraction of the latter country’s total trade. 

“If you look on the bright side, there is lots of room to grow,” he said, to some laughter. 

Prime Ministers Srettha Thavisin and Christopher Luxon speak while inspecting the Thai King's Guard at Government House

Meet the middle class

NZ’s export growth into China has been driven by a fast growing middle-class hungry for high-end products, such NZ milk and infant formula. 

Making goods and services in New Zealand is expensive, due to our high wages and standards of living, and so higher-income markets are more likely to buy our products.

The rise of the middle class which propelled China trade has begun to spill over into other parts of South East Asia and could be a boon for Kiwi exporters.

This prosperity is partly due to friendshoring, a buzzword for big companies shifting some of their production capacity outside of China to reduce exposure to geopolitical risk.

Advice given by the Ministry of Foreign Affairs and Trade to the new Government said many multinationals were pursuing a “China plus one” strategy, and boosting growth in the process. 

“The region’s rapidly growing middle class is generating an impressive growth in demand for consumer items like food and beverage, tourism, and education services,” it said.

New Zealand already has good access to these markets but they haven’t been a focus over the past decade or longer. The last Prime Ministerial visit to Thailand was in 2013, for example. 

As the saying goes: you can pretend to care but you can’t pretend to show up. 

While the joint statements that emerge from these bilateral meetings can be rather thin, MFAT’s advice is that having the head of government in the country builds trust and trade. 

“Showing up in capitals matters if we are to preserve and grow our influence as others crowd into the region,” it said, as doing so demonstrates an investment in the relationship.

Ballingall said he was happy to see Luxon out and about, engaging in photo opportunities.

“If NZ is serious about engaging more deeply with the global economy and exploring alternative markets for our exporters, our politicians need to be out there constantly”. 

Prime Ministers Christopher Luxon and Srettha Thavisin annouce plans to grow two way trade, April 2024

Lead a horse to water 

A trade expert traveling with the Prime Minister said there was no shortage of market access for exporters and the bigger struggle was getting business to take up the opportunities.

Free trade simply means there will be fewer formal barriers at the border. Kiwi businesses still have to navigate language and cultural barriers, while competing with more informed rivals. 

One benefit of these high profile visits is the business delegation traveling with the Prime Minister can leverage his star power to make connections within export markets. 

Early in the trip, Luxon told the delegates that “selfies matter” and that—in addition to his formal duties—he could act as a “salesman-in-chief”.

The National Party leader’s business-person persona can be a liability at home but has been valuable when helping others make connections during his trip through Asia.

His offer to shake hands and pose for selfies with potential customers and partners has been taken up enthusiastically. 

Whether it will be enough to double or triple our export volumes remains to be seen.

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Well done Luxon


You mean well done putting a target up that is so long as to be meaningless? And which avoids addressing the Limits to Growth?

He's lucky that NZ journalism chooses - proactively - to avoid assimilating what that timeframe looks like.…

First graph down, folks. Look at the dates. That graph has tracked truer, longer, than ANY economic projection. Any. 

I've known that graph since 1975 - when were you born, Dan? Don't you think it need to be pointed out, in conjunction with the PMs creed-based nonsense? 


None of your bibles from the 70s seemed to ever factor in declining births being driven by the myriad of social and technological change.

Nor what happens to mature markets when money is easily generated and production relocates to where it's cheaper (that's an even older observation)

If the base foundation is shaky, then everything on top of it becomes ever more tenuous.

Do some wider reading through some fresh eyes.


I was hoping that Luxon and his Thai counterpart Sretta might have announced the resumption of Thai Airways flying between Bangkok and Auckland. Thailand is a popular tourist destination but it's a bit of a chore getting there from New Zealand these days with no non-stop flights.


Direct flights to Koh Samui please!


Do we have to take several hundred thousand immigrants in per year as part of the deal ?  - or is that just an India thing?


Do we have to take several hundred thousand immigrants in per year as part of the deal ?  

Australia has been looking at a visa agreement with Thailand whereby Aussies could live in Thailand (for ex, retirees) and Thais could live and work in Aussie (to fill the "labor shortage"). 


This is actually a more financially prudent concept. Let our elderly access their cheap medical (which is often better resourced than ours), stop clogging up our system, and import paye earners.


This is much needed. Despite the cynicism from the article's writer, this is exactly how you build trade & wealth. It starts with liking & then trusting the other partner in the relationship, over the long term, preferably.

As witnessed by the huge breakdown in our families & general relationships over the past 40 years, we need to work harder at that.


No it isn't (how you build wealth) and it's too late for that (palsy-walsy in an overshot world).

Economics overlooked - chosenly - the real life-supporting capacities of this very finite planet. It did so, because those who got richest by extracting parts of the planet, weren't satisfied - there no such dollar figure as: enough (was That J Paul Getty?) when you're insecure - so they promoted a narrative which lauded 'GROWTH. 

Trouble is, the petri-dish could support maybe 2 billion (at good Thai-peasant level) and south of 1 billion at our level. That overshot population, and the diminishing stocks remaining, are the reason for the tensions over the last 40 years; that's why the neolibs pushed their barrow at the expense of everyone else's. If you want equality and friendship, try calling for population reduction, or at least curtailment. 

Probably too late to avert collapse, but that's the valid move. Which means that both side of our politics are on the wrong track. That makes sense; both champion economic growth. 


How many people have left poverty since the 70s?

The overshoot is in the wealth and lifestyle prospects of those in the West. To the benefit of billions of others.