Tuesday , January 23 2018
Breaking News
Home / International Customs / New Zealand signs free trade agreement with South Korea
New Zealand signs free trade agreement with South Korea

New Zealand signs free trade agreement with South Korea

WALINGTON: New Zealand and South Korea signed a Free Trade Agreement (FTA) to upgrade the bilateral trade between the two countries.

The Trade Minister said that the FTA will deliver real economic benefits to both countries. “It will secure our position in the Korean market and will create more opportunities for traders as tariffs are gradually removed,” he said.

The treaty is expected to encourage further exports of electronics, automotive parts, and other manufactured goods from New Zealand, but some sensitive agricultural products, such as rice, have been excluded by South Korea from the agreement. New Zealand imports from South Korea are mainly refined oil, vehicles, electrical goods, iron and steel, and heavy machinery.

“Initialing marks the end of the text’s legal verification process. It’s another milestone as we progress towards bringing the FTA into force,” Trade Minister Tim Groser said. “The next step is translation of the text into Korean, which will be completed early next year. Following translation, the FTA will be signed.”

On entry into force, tariffs will be eliminated on 48 percent of current New Zealand exports, which will create an estimated duty saving of NZD65m (USD50.3m) in the first year alone. Duties on more than 96 percent of New Zealand’s exports, and particularly dairy products, meat, wine, fish and forestry products, will be eliminated within 15 years. In addition New Zealand will completely remove its duties on all South Korean products within seven years of the agreement coming into force.

Korea is New Zealand’s sixth largest export destination for goods and services and eighth largest import source of goods and services, with total two-way trade of NZD4bn in the year ending June 2014.