ABSTRACT
New Zealand's merchandise trade remains heavily dependent on exports of land-based production. This chapter re-examines the evidence and offers an alternative interpretation of the potential for economic growth based upon primary sector exports. A particular stimulus for this inquiry lies in a policy document that criticised New Zealand's recent trade performance and restated the common wisdom that land-based industries offer limited potential for sustained growth. The chapter discusses the binary notion of simple and complex commodities, in which the former are deemed to contain little added value. The notion of an industry as a sequence of value-adding activities — the 'commodity chain' — presents a valuable analytical framework for examining industrial dynamics, national and regional economies and the context of international trade. New Zealand is a comparatively small economy with a small number of export-oriented industries, a modest range of domestically-oriented industries, and a dwindling number of import-substitution industries.
