New Zealand and South Korea announced on Tuesday they had entered into discussions for a new bilateral free trade agreement (FTA), following talks between New Zealand Prime Minister John Key and South Korea’s President Lee Myung-bak in Auckland.
The two leaders said in a joint statement South Korea and New Zealand had “complementary economic structures”. Trade between the two is worth over NZ$2.4bn (US$1.2bn) a year.
New Zealand’s single-desk kiwifruit exporter Zespri has welcomed the discussions, saying the deal could be worth NZ$33m (US$16.4m) to the country’s kiwifruit growers.
“Korea is a very important market for Zespri. New Zealand exports around 24,000 tonnes of Zespri Green and Gold kiwifruit to Korea each year. In 2008, this market was worth NZ$100m (US$49.7m) to New Zealand kiwifruit growers,” said Zespri chairman John Loughlin in a statement.
The current Korean tariff on New Zealand kiwifruit is 45 per cent, the highest in the world, translating to a cost of about NZ$8,000 per grower.
“Chile, one of our competitors in Korea, has a free trade agreement which will see its tariffs reduced to zero by 2014. Zespri has a superior quality product and marketing and service support, but unless we are able to remove the tariff our ability to service this market becomes unsustainable,” said Mr Loughlin.
“With a free trade agreement of our own, New Zealand kiwifruit can compete on a level playing field and win in the market on the basis of our premium quality fruit.”
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