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Malcolm Bailey
THE DAIRY Companies Association of New Zealand (DCANZ) the NZ-Korea FTA agreement will result in elimination of tariffs on the vast majority of dairy tariff lines over reasonable periods.
For cheese, there will be a transitional quota of 7000 tonnes growing at 3% per year until elimination. For butter, there will be an 800 tonne quota increasing at 3% per year until elimination.
The agreement also includes a permanent quota on milk powder which begins at 1500 tonnes and then increases at 3% per annum until year 10. All of these results compare well with previous FTAs that Korea has concluded with the EU, US and Australia.
DCANZ chairman, Malcolm Bailey (pictured), says the agreement was a good outcome given these had been very difficult negotiations. “With other larger countries having concluded FTAs already with Korea, it was undoubtedly a hard road for Minister Groser and his negotiators to get these outcomes. They have done a fine job in those circumstances and the dairy industry deeply appreciates their efforts,” says Bailey.
New Zealand is a longstanding and trusted supplier of dairy products to Korea. Korean dairy consumption is expanding in-line with rising incomes and imported products play a role in meeting consumer demand that cannot be met by domestic production alone.
“In 2013, Korea was New Zealand’s 19th largest dairy export market, with trade valued at USD$200.5 million,” says Bailey. “New Zealand exporters currently face import tariffs on dairy of between 8 and 176%. In the absence of this deal, this would have resulted in New Zealand dairy exports being at a disadvantage compared with EU, US and Australian exporters who already have FTAs in place.
“In concluding this deal the Government has ensured that New Zealand’s trade opportunities will not be curtailed as a result of export competitors enjoying lower tariff rates than us. That has been a very real worry for the New Zealand industry.”
The agreement with Korea will also complement New Zealand’s existing trade agreements in North Asia including those with China, Hong Kong and Taiwan.
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