NZ-Korea FTA reaping awards – MFAT
The New Zealand-Korea Free Trade Agreement has only been in force since December - and Kiwi companies are already starting to see the benefits.
According to a Ministry of Foreign Affairs and Trade (MFAT) spokesperson, New Zealand's exports to Korea are up by 6.5% - even as Korea's total imports dropped 5%. New Zealand exporters are bucking the trend.
Since December last year, the FTA has eliminated tariffs on $793.7 million of exports. It has given duty free access for a number of key exports, including wine, fruit and vegetables and industrial goods.
MFAT says there have been some positive early results, particularly in the Food and Beverage sector. For the first quarter of this year, New Zealand's fruit exports have more than tripled. The cherry and avocado trade is growing rapidly and buttercup squash, seafood and meat extracts industries are also benefitting.
Korea's Ministry of Trade, Industry and Energy Director for FTA implementation Seongju Shin says the agreement is bringing noticeable benefits for trade between the two countries, particularly Korea's exports of machinery for construction and steel products, and New Zealand's exports of frozen beef, butter and mussels.
"In addition to the benefits in trade, the FTA has made the two countries closer. This leads people to buy more of each other's products," says Mr Shin.
"A closer relationship between the two governments [...] enables businesses to resolve their difficulties much faster than before."
As the FTA is implemented and tariff reductions are phased in, MFAT says a wide range of exporters will enjoy improved access to the Korean market.
Several of New Zealand's main competitors have preferential access to the Korean market. The trade deal helps rectify this imbalance, and allows New Zealand exporters to compete on a more level playing field.
Industries such as beef - which has had to watch on as competitors from the US, EU, Canada and Australia made gains in the market - now have a chance to catch up with the pack.
Greater investment opportunities for Kiwi businesses in the Korean market are also enabled by the FTA. New Zealand investors in Korea have improved protections. And in turn, it's reinforced the attractiveness of New Zealand as a stable investment destination for Korean businesses.
Seongju Shin says, "We hope that the FTA will be a solid platform for stronger bilateral trade and cooperation. Reduced tariffs will allow consumers to enjoy quality products at lower prices and eventually expand bilateral trade. However, it is not limited to the trade itself. We hope to further strengthen and create bilateral cooperation and people-to-people exchanges."
The FTA brings the two countries closer - and just a few months after implementation, it's already reaping benefits for the New Zealand economy.