Korean FTA delivers new round of tariff cuts

More local businesses looking to expand into Korea will benefit from the latest round of tariff reductions under the New Zealand-Korea Free Trade Agreement, Trade Minister Todd McClay says.

The start of 2017 saw two thirds of New Zealand’s exports to Korea become duty free, up from 46 percent in 2016.

“Thanks to this continued progress under the FTA, even more New Zealand businesses can compete favourably in the Korean market,” McClay says in a media release.

New Zealand and Korea celebrated the first anniversary of the agreement in December 2016. Since the FTA’s entry came into force in December 2015, New Zealand has experienced strong results particularly in the food and beverage sector where exports to Korea have increased by over 16 percent.

“Korea is New Zealand’s 6th largest goods export market, worth NZ$1.5 billion in the year ending September 2016, but this isn’t just about productive businesses wanting to sell into Korea,” McClay says.

“The FTA also gives New Zealand consumers better access to high quality Korean goods like electronics, cars and machinery.”

Fifteen years after the FTA’s entry came into force, 97.8 percent of New Zealand’s total current exports to Korea will enter duty and quota free.

Further Information on trade progress with Korea:

  • Meat, dairy, fruit and seafood exports have all enjoyed growth of over 20 percent.
  • The value of New Zealand’s Kiwifruit exports to Korea grew nearly 20 percent in 2016 with further progress expected as the 30 percent tariff on Kiwifruit has now reduced to 22.5 percent (half of what exporters were paying before the FTA).
  • While New Zealand is ranked as Korea’s 10th-largest wine importer, we are emerging as a source of high quality wine among early adopters in the market. The NZ$2.7 million in New Zealand wine sales to Korea in 2015 represented an 18 percent increase from a year earlier. Following the removal of tariffs at the end of 2015, New Zealand wine exports increased a further 29 percent in the first half of 2016 compared to a year earlier.
  • Exports of processed deer velvet have also increased by over 80 percent.
  • From 1 January 2017, the list of products that can be exported duty free will expand to include products such as frozen fish fillets, prepared or preserved frozen potatoes, asparagus, methanol, and skin care cosmetics.

 

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