New Zealand-South Korea FTA ushers in new wave of tariff cuts

Legislation | | MIC Customs Solutions |

A new wave of tariff cuts have been ushered in by New Zealand's free trade agreement with South Korea as of January 1st 2017.

A new round of tariff reductions have been implemented as part of a free trade agreement (FTA) between New Zealand and South Korea.

The FTA entered into force in December 2015, with two-thirds of New Zealand's exports to South Korea becoming duty-free on January 1st 2017 - up from 46 per cent in 2016. By the end of 2030, it is expected that 97.8 per cent of New Zealand's total current exports to Korea will be duty and quota-free.

South Korea is ranked as New Zealand's sixth largest goods export market, with sales to the Asian nation valued at NZ$1.5 billion (€994.54 million) for the year ending September 2016. Since the implementation of the FTA, New Zealand has seen this number climb considerably, particularly in the food and beverage sector, where exports to Korea have increased by more than 16 per cent.

Meat, dairy, fruit and seafood exports have all seen growth of more than 20 per cent, while the value of New Zealand's kiwifruit exports to Korea grew by nearly the same percentage. Wine exports, meanwhile, increased 29 per cent in the first half of 2016 compared to a year earlier, with sales of processed deer velvet also up by more than 80 per cent.

From 1 January 2017, the list of products that can be exported duty-free expanded to include products such as frozen fish fillets, prepared or preserved frozen potatoes, asparagus, methanol, and skin care cosmetics.

Todd McClay, trade minister for New Zealand, said: "Thanks to this continued progress under the FTA, even more New Zealand businesses can compete favorably in the Korean market."

He added: "New Zealanders are benefiting from the government's positive, outward-looking relationship with our global partners, and this includes constantly progressing more free trade agreements."

Mr McClay is currently meeting with representatives from the European Union in the hope of securing a similar deal between New Zealand and the EU.