Exports are a crucial way New Zealand earns a living in the world. Generating our own energy sources also helps our energy security by reducing New Zealand's exposure to energy imports.
New Zealand is a small open economy dependent on commodity exports. Exporting allows businesses to access far larger markets than the domestic economy, providing economies of scale and allowing specialisation in areas of competitive advantage.
By value, half of our exports are milk powder, butter, cheese, meat, logs and fruit. Fifteen percent of exports are from dairy alone. These sectors have served New Zealand well for decades, and will continue to do so, but they expose the national economy to risks in terms of international commodity price movements, shifts in market preferences or market access, or climatic change.
As a country, if we export more, we earn more. It also means we borrow comparatively less to pay for our imported goods. That puts the country in a much better economic position, fostering greater business confidence and stimulating a positive environment for more growth and jobs, and the myriad benefits that accrue from greater economic activity.
Alternatively, trade deficits (higher net imports) can lead to a growing national debt burden, and increased debt servicing costs.