The origins of the trade between New Zealand and continental Europe are obscure, but no doubt there was at least a nucleus about the mid-nineteenth century. This obscurity continues into the later nineteenth century, for any continental trade was done through English ports and warehouses and is thus officially recorded as trade with Britain.

Exports

The history of New Zealand's export trade with Europe has always been the history of New Zealand's wool trade with European countries. European wool production fell steadily throughout the nineteenth century as more land was needed for tillage and food production. European textile industries demanded increasing amounts of raw wool and looked to the new world for supplies. New Zealand shared these wool markets mainly with Australian and South African producers.

Until the First World War, New Zealand's export trade was limited to a very few countries. Throughout the nineteenth century exports to Britain and Australia comprised practically the whole total. Exports to Germany (which early established itself as the main European market for New Zealand) and other European countries were affected by the high import tariffs maintained by these countries on foodstuffs, so that direct New Zealand exports to Europe remained an insignificant part of the export trade. Wool, together with a little kauri gum and scheelite, made up total direct exports to Europe in the nineteenth century.

No doubt more of these products, and one or two other products, entered Europe than the official statistics show. But these indirect exports did not alter the pattern of New Zealand's export trade with Europe. In 1895, when total exports were valued at £8.5 million, direct exports to Germany were ££valued at only £2,500, and Germany was the main European importer from New Zealand in that year. In 1909, when total New Zealand exports were ££19.6 million, exports to Germany were 77,000, consisting of wool, kauri gum, casings, and seeds. Exports (almost all wool) to France in the same year were £47,000. These two countries dominated New Zealand export trade with Europe to 1910, although in that year there was a small export trade with Russia, Holland, Sweden, and Denmark. By 1914, when total New Zealand exports were 26.2 million, exports to Germany were 456,000 (or 1.7 per cent of total exports); to France, £227,000; and to Belgium, £33,000.

It is clear, however, that there was a considerable export trade with European countries which is not recorded in official New Zealand statistics. In 1909, for example, exports of wool to Britain were valued at £7 million; but 2 million of this was re-exported from London to the manufacturing centres of Belgium, Northern France, and Germany. To 1914, up to 25 per cent of all New Zealand wool exported to Britain was re-exported to Europe. Other New Zealand products re-exported from Britain to Europe each year were sausage casings, kauri gum, Phormium, sheepskins, and copra (shipped through New Zealand from the Pacific Islands). It would seem, therefore, that up to 1914 about 15 per cent of total New Zealand exports by value each year went to Europe, either direct or through Britain.

The First World War saw the first break in the steady increase in trade with Europe which had marked the previous three to four decades. Exports to Germany ceased after 1914 and did not really begin until the early 1920s. Exports to France, however, increased steadily throughout the war, and by 1918 had quadrupled their 1914 value. Exports to other continental countries stopped completely throughout this disturbed period. In the twenties the pre-war pattern of trade with Europe was reestablished. The removal of the embargo on imports of German goods from 1 September 1923 was responsible for the huge increase in exports to Germany in 1924 – over £1 million, compared with £190,000 in 1923. A similar pattern of re-exports from Britain to Europe took place, although the percentage by value of total New Zealand export trade with Europe averaged from 10 to 12 per cent, somewhat lower than the pre-war average. In the 1930s France replaced Germany as the major market. In certain years exports to Belgium were even greater than those to Germany.

New Zealand trade with Europe ceased during the Second World War. Features of the post-war trade with Europe have been the preponderance of wool as the major export; the rise in the importance of Italy as a buyer of New Zealand products, along with France (the major market), West Germany. and Belgium; restrictions imposed in all European countries on imports of meat and dairy produce, which has severely limited exports of New Zealand produce; the formation of the European Economic Community, whose common agricultural policy is likely to make it increasingly difficult for New Zealand to expand exports of foodstuffs to Europe; and the irregular but, nevertheless, substantial purchases of New Zealand wool by eastern European countries, notably the U.S.S.R. and Poland.

Imports

In the nineteenth century New Zealand imported mainly from Britain and Australia, but no doubt manufactured goods from Europe came through Britain. As, however, New Zealand exports to Europe expanded in the later nineteenth century, imports also increased. By 1892 Germany was the major European supplier – direct imports from that country being £90,000 out of a total New Zealand import of £7 million. Small imports of a few thousand pounds each are recorded from France, Belgium, Holland, and Italy. In 1910 imports from Germany were £390,000 out of a total import figure of £17 million. The main imports from Germany were glassware, musical instruments, tools, fancy goods, and even cloves and grass seeds; those from France, wines and spirits; from Italy, almonds and marble; and from other European countries, dried and preserved fruits and foods, chemicals, and fancy goods. By 1914 Germany was supplying £610,000 out of total imports of £21 million. It is interesting to note that imports from Switzerland at this time were mainly confectionary and textiles. Import trade almost ceased from 1914 to 1918, although regular imports were recorded from Italy and Sweden. A ban on imports from Germany in the early 1920s meant that France and Italy were the major European suppliers to New Zealand, although the value of imports from the Continent was a small part of total New Zealand imports.

Imports from Europe showed a small but steady increase up to the Second World War; their origin and range were more diverse. For example, in 1926 New Zealand imported nearly £1 million or 2 percent (of a total of £49 million) from European countries, with Belgium and France the largest suppliers. By 1939 the percentage had risen to 9.4 per cent of the total imports and Germany was again the largest exporter to New Zealand, with a wide range of commodities, especially clothing, steel goods, hardware, and paper. Other exporters of any size were Czechoslovakia (glass and hosiery), Italy (silk goods), France (silks), Sweden (hardware, agricultural and dairying machinery), Belgium (glassware), Finland (paper), and the U.S.S.R. (motor spirit). Post-war Europe contributed only a small percentage of New Zealand imports (3.5 per cent in 1949). But the rapid rate of European reconstruction and industrial expansion has led to a significant increase in imports from continental Europe (9.5 per cent of total imports in 1964). In 1964 the seven major European exporters to New Zealand were Western Germany (£8.8 million, from a wide range of commodities, especially machinery, cars, fertilisers, and optical instruments); the Netherlands (£3.9 million, the major item being electrical machinery); Switzerland (£3.0 million, mainly pharmaceutical products and watches); Sweden (£3.0 million, mainly machinery and paper); Italy (£3.0 million, mainly fabrics and cars); France (£2.5 million, mainly cars and wines); and Belgium (£2.4 million, mainly steel, glass, and fabrics). Finland, Norway, Denmark, Austria, Czechoslovakia, Portugal, Spain, and East Germany contributed smaller amounts. The value of imports from European countries in 1964 amounted to £29.94 million out of a total import expenditure of £317 million.)

by John Bernard Prendergast, M.COM., Director, Overseas Trade Division, Department of Industries and Commerce, Wellington.