New Zealand and Korea complete Free Trade Agreement | March 2015
The New Zealand and the Republic of Korea governments have completed negotiations on a Free Trade Agreement (FTA) between the two countries. Korea is New Zealand’s sixth largest export destination and eighth largest import source, with total two-way trade of $4 billion in the year ending June 2014.
The benefits for New Zealand
New Zealand exporters currently pay over NZ$220 million in duty to that market. Tariff changes under the Free Trade Agreement will see significant savings in the first year and ultimately duties on current exports will be eliminated within 15 years of the agreement coming into effect. In the long-term it will see New Zealand exporters on a level playing field as other countries such as US, the EU and Chile. This will boost our bilateral trade and provide benefits to exporters and importers in both countries.
Under the new Free Trade Agreement major changes will be made across many sectors allowing New Zealand exporters to grow their presence in Korea. The food and viticulture sectors will see the most change:
- Tariffs on wine will change immediately, putting them on a level playing field as other competitors in US, the EU and Chile
- Dairy is a highly sought after product in Korea that attracts a high tariff rate. The FTA will provide new opportunities with lower tariff rates over time.
- Korea is the 6th largest export market for export beef. Beef, lamb and other meat products will eventually become duty free
- Over the next 6 years tariffs will reduce for the Horticulture sector. In the year ending June 2014 New Zealand exported over NZ$44 million worth of Kiwifruit and Buttercup squash to Korea
Want to know more?
The New Zealand Ministry of Foreign Affairs and Trade website provides full details of the Free Trade Agreement and when all the changes come into effect. Contact your Air and Ocean Account Manager who can talk through the finer details with you.