Russian Foreign Minister Visit Positive for Trade

Russian Foreign Minister Visit Positive for Trade, Says HSBC

- Russia one of NZ’s top growing trade partners in next 5 years –
- Trade with Russia forecast to grow by 14.06% over next 5 years

HSBC has welcomed the signing of the “consultation plan” between Russia and New Zealand as it means that we are now one step closer towards the signing of the Free Trade Agreement between the two countries, and its custom union countries Belarus and Kazakhstan.

According to HSBC’s latest Trade Connections Report, Russia is second in the list of New Zealand’s top 10 growing trading corridors over the next five years, outranked only by Argentina.

Gary Cross, Head of Trade and Supply Chain, at HSBC says: “With annualised trade between New Zealand and Russia forecast to grow by 14.06% over the next five years and by 10.39% over the next 10 years, we welcome the news that the ‘consultation plan’ has been signed between Russian Minister of Foreign Affairs, Sergey Lavrov and Foreign Trade Minister Murray McCully.

“This clearly signals that we are one step closer towards the signing a Free Trade Agreement with Russia, and its custom union countries Belarus and Kazakhstan, and clearly reflects the importance of New Zealand’s position as an agricultural producer with strong trade routes,” continues Cross.

If these negotiations lead to the signing of the FTA at APEC in Vladivostok later this year, New Zealand will be the first country in the world to have a FTA with Russia.

“The FTA represents a huge opportunity for New Zealand exporters and importers, and businesses need to seriously start doing their homework on the Russian market and exploring the options available to them – including understanding how making payments using the Ruble could advantage them,” points out Cross.

“Like any overseas market, trading with Russia does have some inherent risks, so anyone considering doing business there would need to identify and manage the risks accordingly. However, you could have said the same thing about Europe after 1945 or during the Cold War," he continues.

“Although there were still significant economic barriers there were huge incentives for New Zealand businesses to trade with emerging markets, such as Russia – particularly when you consider some of the strong fundamentals including low inflation and the planned investment in infrastructure in the future. In fact, the BRICs (Brazil, Russia, India and China) have earmarked spending in the region of US$8trillion over the next 10 years on infrastructure which is about 80% of the world’s infrastructure spend over that period,” concludes Cross.

Russia is currently New Zealand’s 17th largest trading partner*, with some of our largest exports including butter, lamb, beef, frozen fish and cheese.

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