It’s already looking like a bumper harvest for New Zealand’s kiwifruit growers and marketers, but they officially have another reason to be happy this week, as a Free Trade Agreement between New Zealand and Korea was inked by both governments on Monday, promising a complete reduction of the 45% tariff currently imposed on kiwi exports to the Korean market. “We’re really pleased the government has completed this agreement. The industry has been very focused on a Korean FTA, especially since our Southern Hemisphere counterparts competitors, in Chile, have been given preferential treatment and have had duty free access for some time,” says Nick Kirton, Government Relations Manager for the kiwifruit marketing organization, Zespri.
The reduction will come in gradually over five years, with an initial cut of 7.5% expected upon implementation of the agreement later this year. Each year the tariff will be reduced by a similar amount until 2020, when it will be reduced to zero. The deal negotiations have been five years in the making, with stops and starts, and other Korean trade deals completed in the meantime.
The agreement has been signed by both the New Zealand and South Korean governments, and is now expected to go through parliamentary proceedings. Mr Kirton says he does not expect there to be any major obstacles to this process. “I know from experience and the nature of these agreements that there might be some people who would like the tariff reductions to come in earlier, but the government has done a great job in balancing competing needs and reaching this fantastic outcome. The New Zealand government does a good job of talking to exporters. They’ve been great at talking to us and letting us know what’s happening throughout the FTA negotiations.”
The news caps off an uplift in the general mood of the kiwi industry, as it is able to move on and recover from issues with PSA bacteria infecting some crops in recent years. “What we’re seeing is an increase in supply as we recover from the effects of Psa. It’s a great story to have. We’re in a good place to be with trade barriers coming down [through the signing of the FTA] and very good volumes coming through,” adds Mr Kirton.
Overall, thanks to the good news on supply and volumes, and the promise of the FTA, Mr Kirton expects the output of the next harvest sales into Korea to increase by up to 10% over the next season.
For more information
Nick Kirton – Government Relations Manager
ZESPRI
Phone: +6475727757
E-mail: nick.kirton@zespri.com
Website: www.zespri.com