The signing of the Free Trade deal with Korea, singed by Trade Minister Tim Groser yesterday has the potential to add millions of dollars in extra export earnings.
“Improving access to international markets through free trade agreements is a key component of the Government’s Business Growth Agenda. Supporting our exporters is crucial to creating new jobs and boosting incomes for New Zealanders,” says Mr Groser.
“This Agreement secures the long-term future of New Zealand exporters to Korea whose international competitors were benefiting from Korea’s other FTAs.
“It reduces barriers to trade and investment, provides greater certainty about the business environment and ensures our exporters remain competitive in each other’s market.”
On entry-into-force, tariffs on 48.3 percent or NZ$793.7 million of New Zealand’s current exports to Korea will be eliminated. The Agreement will progressively remove tariffs on 98 per cent of New Zealand’s exports to Korea.
“Particular success stories include the removal of wine tariffs of 15 percent on entry into force, and the removal of 45 percent tariffs on kiwifruit effectively five years after entry into force,” says Mr Groser.
“It will also make possible a new level of cooperation in areas like agriculture, the creative economy, the environment and education, and spur greater investment.”
The FTA will offer improved protections for New Zealand investors in the Korean market, and reinforce the attractiveness of New Zealand as a stable investment destination.
“The Agreement shows the strength of the relationship between New Zealand and Korea. It symbolises our countries’ commitment to economic openness and market integration in the Asia-Pacific region,” says Mr Key.
“Korea is one of New Zealand’s biggest and most important trading partners. This Agreement makes it easier for Koreans and Kiwis to do business with each other, and the removal of tariffs will benefit consumers in both countries.
“At the moment, New Zealand exports into Korea attract NZ$229 million a year in duties. Tariff reductions in the first year of the FTA alone will save an estimated NZ$65 million.”
The Agreement now needs to be ratified by the New Zealand Parliament.
“We are keen for the Agreement to come into force this year,” says Mr Key.
“With a population of over 50 million and as the 13th largest economy in the world, Korea is an attractive market for New Zealand exporters.” . . .
Korea is New Zealand’s sixth largest export destination for goods and services and our eighth largest import source, with total two-way goods trade of NZ$4 billion.
Once ratified by parliament, the FTA will open the door to better business for Koreans and New Zealanders.
It makes the eggs in other trading baskets than China more valuable, will give better returns for our exporters and more choice and lower prices for consumers in both countries.