Living and adapting on the edge: New Zealand’s trade and trade policy in a changing world - NZIER Insight 125

New Zealand Institute of Economic Research (Inc)
Media Release, 26 March 2026
For immediate release

New Zealand must adapt as global trade becomes more fragmented

New Zealand faces a more uncertain and fragmented global trading environment, requiring us to redouble our efforts on trade policy, according to a new NZIER Insight released today.

“The world has changed, and we have to adapt,” says Chris Nixon, Principal Economist at NZIER and author of the report.

“New Zealand has always relied on trade for its prosperity, but the global environment is becoming more complex and less predictable. The easy gains from trade policy have largely been made.”

The Insight highlights that while New Zealand’s active free trade agreement strategy has delivered strong results, covering over 70 percent of trade and opening access to billions of consumers, future gains will be harder to secure.

“Tariffs are no longer the main barrier. The real challenges now sit behind the border – in regulation, standards, and how economies work together in practice,” Nixon says.

The Insight argues that New Zealand’s success has always come from its ability to adapt to changing global conditions – from the loss of preferential access to the United Kingdom in the 1970s, to the rise of China as a major trading partner in recent decades.

“That lesson still holds. New Zealand cannot shape the global trading system, but it can position itself to navigate it effectively.”

Looking ahead, we suggest shifting strategy from pursuing new agreements to extracting more value from existing ones and deepening relationships with trusted partners.

“This means focusing on practical steps like mutual recognition of standards and regulatory cooperation. These are less visible than traditional trade deals but can deliver significant economic benefits,” says Nixon.

The importance of domestic capability in supporting trade success is also emphasised.
“Trade policy amplifies what the economy can already do. Productivity, innovation, and strong institutions are just as important as market access.”

While agriculture remains a core strength, services are playing an increasingly important role in New Zealand’s export performance, both as standalone exports and as inputs into goods.

“In a more contested global environment, New Zealand’s advantage lies in being nimble — responding quickly to opportunities and adapting as conditions change.”

NZIER concludes that rather than pursuing grand trade initiatives, New Zealand should focus on disciplined, pragmatic engagement.

“The goal is not to control the system, but to work within it — moving when opportunities arise and deepening integration where it makes sense,” Nixon says.

For further information, please contact:
Chris Nixon 
Principal Economist 
Mobile 021 633 127
Chris.nixon@nzier.org.nz