After seven rounds of negotiation since talks began in June 2009, the New Zealand-Korea Free Trade Agreement (NZ-Korea FTA) was signed in Seoul on 23 March 2015.
The two nations have a long history of friendship and co-operation dating back to the Korean War, and in trade are natural and complementary partners: New Zealand exports the primary products in demand in Korea, and Korea exports the manufactured goods in demand in New Zealand.
The NZ-Korea FTA is a high quality, win-win agreement covering goods and services trade as well as investment. Its provisions will further enhance growth of the New Zealand-Korea trade relationship, worth $4 billion in the year ending June 2014.
Under the NZ-Korea FTA, New Zealand exporters will gain improved access to Korea, a nation with a population of 50 million people and already New Zealand’s sixth-largest export destination.
New Zealand is Korea’s 40th-largest trade partner, and Korea is New Zealand’s eighth-largest import source.
On entry-into-force (EIF) tariffs will be eliminated on 48 percent of current New Zealand export goods including wine, cherries, hides and skins, some forestry products, some industrial goods and many industrial goods. Within 15 years there will be a progressive phasing out of tariffs on about 98 percent of current New Zealand export goods including kiwifruit, buttercup squash, dairy products (with the exception of milk powder which will face a permanent capped tariff rate quota), meat and meat products (except unprocessed velvet), fisheries products (except squid, and frozen mussels which will face a permanent capped tariff rate quota) and forestry (except for two non-traded lines of particleboard and plywood).
Tariffs on Korean imports will be eliminated over seven years on goods including refined oil, vehicles, heavy machinery, iron and steel, plastic, rubber and home appliances.
The Korea-NZ FTA will help keep New Zealand exporters competitive in the Korean market. The tariff reductions under this FTA are of significant benefit to New Zealand exporters, who will save an estimated NZ$65 million in duties in the first year alone.
Greater access to the natural and safe, ‘clean and pure’ healthy food goods of New Zealand is desirable for Korea. The complementary, counter-seasonal nature of New Zealand’s and Korea’s growing cycles is ideal for ensuring a steady supply of high quality agricultural produce year-round. We, also, think this FTA will have a significant impact in bringing New Zealand products to the forefront in the Korean market.
The growing of New Zealand kiwifruit at Zespri orchards on Jeju Island is an example of successful collaboration between New Zealand exporters and Korean farmers, and the NZ-Korea FTA allows for further development of positive relationships and co-operation to improve productivity. The NZ-Korea FTA also allows for more co-operation in the areas of education, science and technology, and film and television.
The NZ-Korea FTA provides protection for investors and clear and transparent rules governing trade,
to create a stable and predictable environment for business planning and investment. Under the NZ-Korea FTA, easier goods trading is facilitated by changes and enhanced co-operation in areas such as customs procedures and trade facilitation, rules of origin, sanitary and phytosanitary rules, technical regulations, and temporary entry for business persons.
The Korea-New Zealand FTA contains provisions for greater transparency and information sharing, and promotes the importance of intellectual property rights in fostering trade between New Zealand and Korea. This FTA also contains a clear and detailed process for the resolution of any dispute arising under this FTA.
“The Korea-New Zealand FTA signing will go down as a memorable milestone in the 53-year history of bilateral diplomatic ties,” President Park said during a meeting with New Zealand Prime Minister John Key. The FTA reinforces and encourages an even closer relationship between New Zealand and Korea into the future. Entry-into-force is subject to ratification, which is expected to be completed in September 2015.