New Zealand, Britain and the Survival of the Ottawa Agreement, 1945–77*

Abstract

Unlike Australia, which diversified its markets after 1950 (to the extent that Japan superseded Britain as Australia's foremost customer in the late 1960s), New Zealand remained dependent on outlets in the United Kingdom. New Zealand's reliance on the British market was a consequence of its emphasis on the export of livestock products, imports of which were restricted by other major industrial countries. This paper argues that New Zealand's trade policy was tightly constrained by its short- and medium- term reliance on UK markets. As a small country, New Zealand had little bargaining power. In order to induce the British to safeguard New Zealand's traditional export trade, Wellington had to offer generous tariff preferences to British manufacturers, who retained a dominant position in New Zealand in the 1960s. New Zealand found it difficult to escape from this situation, because it had even less bargaining power with other countries, and it feared British retaliation against its lamb and butter exports. Failure to match Australia's record of diversification left New Zealand particularly vulnerable when Britain joined the European Economic Community (EEC) in 1973.