Korean industrial circles see Korea-NZ FTA to be beneficial for the nation’s industry

S. Korean industrial circles estimate the nation’s free trade agreement with New Zealand would be beneficial for the nation’s industry because under the pact, the two sides can potentially generate clear mutual benefits based on each other’s industrial backgrounds: manufacturingfocused country of S. Korea and an agriculture-focused nation of New Zealand.

New Zealand has been positioned as Korea’s 44th largest trading partner and relies on importation to meet its domestic demand for industrial products, meaning that the nation is the ideal FTA partner to the world’s 15th largest economy.

Cars from South Korea, the main export item of the nation, have already been shipped to New Zealand with no tariff, so benefits from the FTA will also be specific in other industry sectors like gasoline, heavy equipment and electronic products. Exports of car ties and washing machines will increase thanks to the FTA and tariff on car parts and refrigerators will disappear in three years.

S. Korea hopes competitiveness would be strengthened against rival economies as the FTA requires the abolition of tariff on bus, truck and other commercial vehicles in three years, where Korea competes with Japan fiercely. Korea’s textile industry in rivalry with China will be benefitted from tariff removal that will be realized within seven years.

New Zealand agreed to remove tariffs on all Korean products within seven years. Agricultural machinery, food processing and packaging facilities and small miscellaneous goods will be subject to tariff removal, which will encourage S. Korea’s small-and mediumsized enterprises (SMEs) to go overseas. The issue of display of the nation of origin was not contentious in the FTA negotiations because products in competition between the two partners are not overlapped.

 
 
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