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| President Park Geun-hye shakes hands with New Zealand Prime Minister John Key after a joint news conference at Cheong Wa Dae, Monday, when the two nations formally signed a free trade agreement. / Yonhap |
By Kang Seung-woo
Korea formally signed a free trade agreement (FTA) with New Zealand, Monday.
President Park Geun-hye and New Zealand Prime Minister John Key marked the signing of the free deal between the two countries during a summit at Cheong Wa Dae.
Under the bilateral trade deal, Korea's tariffs on 96.4 percent of all products from New Zealand will be phased out within the next 15 years after the deal goes into effect. By comparison, The Oceanian country will remove tariffs on all Korean goods within seven years of the deal taking effect.
New Zealand has become the last major economy to seal a deal with Seoul, which has an FTA network of 12 members including the United States and the European Union.
Among 34 member countries of the Organization for Economic Cooperation and Development, only three — Japan, Israel and Mexico — are left off the list.
"The Korea-New Zealand FTA signing will go down as a memorable milestone in the 53-year history of bilateral diplomatic ties," President Park said during the meeting with the Prime Minister.
"It has paved the way for the two sides to increase cooperation in a wide range of areas such as cultural and people-to-people exchanges as well as the economy and trade."
Prime Minister Key said, "Korea is one of New Zealand's biggest and most important trading partners. This agreement makes it easier for Koreans and Kiwis to do business with each other, and the removal of tariffs will benefit consumers in both countries.
"With a population of over 50 million and as the 13th largest economy in the world, Korea is an attractive market for New Zealand exporters."
The FTA ratification is subject to parliamentary approval of both countries.
"We are keen for the agreement to come into force this year," said Key.
The two nations began their FTA talks in June 2009 and went through seven rounds of negotiations that included two informal ones before the two heads of state announced the conclusion of the negotiations on the sidelines of the G-20 summit in Brisbane, Australia last November.
According to Park's office, the government has excluded 199 key items, including rice, natural honey and fruits, from concession targets, while New Zealand's beef will become tariff-free within 15 years. In addition, tariffs on milk powder, one of New Zealand's largest exports, will remain.
According to the presidential office, New Zealand is Korea's 40th-largest trade partner, with $3.2 billion (3.5 trillion won) in 2014.
In addition, New Zealand, with its per capita gross domestic product exceeding $40,000, has yet to sign a free trade deal with Japan, so the tariff-reduction deal will give cost competitiveness to Seoul's exports to Wellington over those from Tokyo.
According to Cheong Wa Dae, refrigerators, washing machines, auto parts and heavy construction equipment are expected to benefit from the deal.
Along with the FTA signing, Park and Key discussed ways to enhance bilateral cooperation in fisheries, defense, technology and information, and communications.
The two nations also agreed to continue their joint efforts in Antarctic research.
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