CEO letter:

Trade and international relations

Kirsten (KP) Patterson

Nĭmén hăo, 

Master 9 has been selected for his local Club’s Under-11 rugby trip to Australia next year. His first “representative” team and what he considers the first step in his plan towards his All Blacks playing career.

Attached to the notice of his selection was a note, or a warning, for parents. Selection is dependent on parental participation in fundraising. I now suspect that I will spend more hours fundraising than he will spend training.

The big fundraiser for the season is a naming rights raffle – aimed at local companies with the winner having their name on team jerseys etc for the tour. Trying to get Master 9 involved in the process, we asked him which companies we have a relationship with and who he thought we should approach. He was able to identify a list quite quickly – Google, Facebook, Apple, Netflix, Air NZ and The Warehouse.

If Facebook was a country it would apparently be the third-largest in the world. How do you get the leader of the third-largest country in the world to sponsor your local rugby team?

Asking him to identify companies that he personally has a relationship with via his pocket money didn’t help narrow down any reasonable prospects – all big box or online retailers, YouTube influencers, or companies selling digital products. Trade sure has changed, even at the pocket-money level.

This edition of BoardRoom launches our second “What Matters” theme for the year – the future of trade.

During my high school education in 1990s small-town New Zealand we were all encouraged to learn Japanese because they were the economic export powerhouse, the technology leaders and the source of our in-bound tourists. Mandarin or Cantonese were not even options. Yet a review of the monthly movements for our top export partners for April 2019 (ranked by total annual good exports) has Japan in fifth place.

China – up $327m (29%) to $1.4b. The rise was led by milk powder (up $87m), beef (up $71m) and lamb (up $38m).
Australia – down $27m (3.9%) to 680m.
EU – down $7m (1.1%) to $614m. The fall was led by lamb (down $17m).
USA – up $86m (18%) to $557m, led by milk powder, butter, and cheese (up $42m) and wine (up $22m). The rise was partially offset by a fall in beef (down $27m)
Japan – up $29m (8.5%) to $368m. The rise was led by gold kiwifruit (up $25m).

Who we have relationships with and what trade looks like internationally has transformed, and it’s not just the internet’s fault.

There was a great metaphor about the trade war used at the World Economic Forum “Meeting of the New Champions” in September last year:

“The analogy I use is football. One team shows up on one side of the field. They are the World Cup champions. And on the other side of the field you have the Super Bowl champions. They’re both there to play football but they have very different ideas… each team plays a very good game but the rules they play are designed to showcase different skill sets.

“The World Cup football team is very agile, they move very quickly, they adjust rapidly. The American football team is more deliberate – every play is planned, every player on the field has a coordinated role, they wear protective gear. Basically the US and Chinese economies are like these two teams, playing on the same field.” – Timothy P Stratford, Covington & Burling (international law firm) The sports analogy is one here in New Zealand we understand well but we need a global response to ensure it’s not just two teams on the field, and we all get a say in picking the referees.

Zàijiàn

Kirsten (KP)

2019 June/ July BoardRoom