Korean FTA anniversary celebrated
Trade Minister Todd McClay has welcomed strong export growth to Korea during the first year of the New Zealand-Korea Free Trade Agreement (FTA).
“There is no doubt this agreement has created jobs and prosperity in our regions,” says Mr McClay.
At an event to mark the upcoming one-year anniversary of the FTA, Mr McClay told members of the Korean and New Zealand business community that New Zealand exporters are enjoying the benefits of preferential tariff access to the Republic of Korea.
In the first nine months since entry into force of the FTA in December 2016, New Zealand’s food and beverage exports to Korea increased 16 per cent, to $449 million, compared to a year earlier.
“Those products where tariffs have been eliminated immediately have fared extremely well. Exports of New Zealand cherries to Korea, for example, which previously had a tariff of 24 percent, have more than doubled (221 per cent) to $4.3 million between January and the end of September while New Zealand wine exports rose 28 per cent to $1.9 million following the removal of a 15 per cent tariff,” says Mr McClay.
Butter (up 150 per cent to $12 million) and cheese (up 13 per cent to $58 million) exports are benefiting from improved access under duty free tariff rate quotas established by the FTA.
“There has also been significant improvement in export items where tariffs will be removed over time. The value of New Zealand’s substantial kiwifruit exports to Korea have grown 18 per cent so far this year to reach $65 million. Avocados are up 39 per cent, meat extracts for food preparations up 62 per cent, and deer velvet up 81 per cent.
“These early results are extremely encouraging and will create more jobs and raise returns, particularly in regional and provincial New Zealand, where the production of these items are concentrated.
“Many exporters can look forward to further improvements to their products’ competitiveness in the Korean market when the third round of tariff cuts under the FTA takes place on 1 January 2017,” says Mr McClay.
In the year ending September 2016, the Republic of Korea was New Zealand’s 6th largest goods export market worth NZ$1.5 billion.