New Zealand could sign a free trade agreement (FTA) with South Korea within a year, Prime Minister John Key says, as he warned (Kiwi Chamber – a Seoul business group) talks needed to be treated with urgency. Talks (which stalled in 2010) maybe resuming as soon as October according to South Korean President Park Geun Hye.

“Both New Zealand and South Korea have signed FTAs with other countries, and need to ensure that the stiff tariffs imposed by South Korea did not hurt the relationship. In the very least according to New Zealand Prime Minister John Key “We need to get our deal done to ensure that the bilateral trade relationship keeps pace with the trade relationships we have with other countries.”

Key is confident that a deal could potentially be signed within a year, and the odds of an agreement within three years was 65 per cent: “There are always potentially sticking points and in the end it can come down to quality of the agreement but I’d have to say, on balance, I’m better than 50:50 we’ll get there.”

An FTA with South Korea could be worth “billions”, Key said.  South Korea has a population of 50 million, their wealth per capita is similar to New Zealand’s and they are destined to become wealthier.

Sir Graeme Harrison, the founder of meat processing company ANZCO and chairman of the NZ International Business Forum, said New Zealand had only limited product to sell to the world, but a deal with Korea would help spread risk. “This is about a balance of risk, because clearly we don’t want to put all our eggs in one basket.” Harrison said business with South Korea was already being eroded by its agreements with other countries. Exports of beef were being hurt by the US FTA with South Korea while kiwifruit exports to were being hit by Chile’s agreement with Seoul.”

It is important to keep in mind that New Zealand’s tariffs on products to China, Hong Kong and Taiwan – which for the purpose of the free trade deal is with Chinese Taipei – will be eliminated by 2016. Yet for New Zealand products entering South Korea, a tariff of up to 40% in some cases is still being imposed. This cannot be good for both New Zealand and South Korea.

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• Korean FTA could be signed within year (nzherald.co.nz)
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• Exporters look to PM for progress on Korean FTA (radionz.co.nz)
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