New Zealand is a step closer to a free trade agreement (FTA) with South Korea, with the Tariff Amendment Bill passed through New Zealand's parliament on 24 September.
New Zealand kiwifruit marketer Zespri has welcomed the move, with an FTA to potentially be ratified by the end of the year, which would see a 33 per cent reduction in New Zealand kiwifruit exports to South Korea in time for the next season.
Once the FTA is in full force New Zealand kiwifruit import tariffs will drop from 45 per cent to 0 per cent over five years.
“For Zespri, the elimination of the tariff means that we will be able to offer more competitive pricing to Korean consumers and therefore maintain a competitive position in the market as well as providing greater returns to New Zealand kiwifruit growers,” Lain Jager, Zespri CEO, said in a company statement. “This is a fantastic outcome for the industry and will ensure that South Korea remains a priority market for Zespri.”
As its seventh largest export market, Zespri has forecast a 10 per cent annual sales volume growth in Korea over the next five years, and has also invested in developing its kiwifruit production in the country, with 100ha of orchards already established in the country.
“We now look forward to further progress by the government on other trade initiatives, particularly the Trans-Pacific Partnership,” Jager added. “A high quality, comprehensive agreement among 12 Asia Pacific nations that eliminates tariffs will generate significant value for the New Zealand kiwifruit industry, with our tariff payment in our largest market Japan alone being around NZ$16m in 2014.”