Korea FTA to boost NZ's farming, dairy firms

New Zealand Ambassador to Korea Clare Fearnley / Courtesy of the New Zealand Embassy

By Rachel Lee

The most significant characteristic of the Korea-New Zealand Free Trade Agreement, which came into force on Sunday, is that it was a "catch-up deal" rather than a new one, says New Zealand Ambassador to Korea Clare Fearnley.

"For us, it's a bit unusual," she told The Korea Times at her residence in Seoul on Dec. 15. "Normally, we are opening up a new market that no one else has enjoyed, but this time round, basically we are doing a catch-up FTA. We are catching up with all of the countries that have already concluded preferential trade agreements with Korea."

Although nothing new was included in the trade deal, it still meant a lot of work over several years, and Fearnley was lucky ― her appointment as ambassador in Korea was made just after negotiations had been concluded and just before it was signed in March.

"The Korean negotiations were tough because there were many challenges to accommodate," she said. "For example, we had a list of products that were excluded in the deal such as apples, or quantitative restrictions imposed on other products."

Fearnley, who took up office in Seoul in January this year, has built her diplomatic career in the Asia Pacific region over a considerable time ― she was North Asia and trade director-general in 2014, and Asia-Pacific regional director-general and senior official for EAS/ARF/APE at the New Zealand Ministry of Foreign Affairs between 2011 and 2014.

New Zealand Ambassador to Korea Clare Fearnley, second from right, poses with participants of the
New Zealand-Korea festival in Korea in October. / Courtesy of the New Zealand Embassy

She was also New Zealand representative and director of the New Zealand Commerce and Industry Office in Taipei between 2004 and 2007.

According to the New Zealand Chamber of Commerce in Korea, the trade deal is expected to reduce tariffs on New Zealand exports to Korea by 56 billion won in the first year. Overall, about 98 percent of tariffs on New Zealand's exports to Korea will be eliminated.

Under the agreement, exporters from both sides are expected to benefit from two rounds of tariff cuts ― the first on Sunday and a second round on Jan. 1, 2016.

"It was estimated that there would be a $6 billion benefit for Korea by 2030 and $4.5 billion for New Zealand," the ambassador said. "Given the scale of the economies, it is not a huge amount, but I think it is useful and valuable."

Korea is New Zealand's sixth-largest trading partner.

Key tariffs to be eliminated over time include duty on kiwifruit (45 percent), butter (89 percent), beef (40 percent), wine (15 percent) and up to 11 percent on most processed wood products.

The ambassador, a big fan of wines herself, is excited about more high-quality New Zealand wines being introduced in Korea at competitive prices.

"We produce fine pinot noir and cabernet sauvignon wines, and I hope Korean consumers become more familiar with New Zealand wines through the FTA," she said.

The wine industry, in particular, has become competitive in Korea especially after FTAs with major wine-producing countries like Australia and Chile. In terms of winemakers' market share here, France led the way with 30.5 percent in the first six months of last year, followed by Chile, Italy and the U.S. with 20.8, 16.6 and 11.8 percent, respectively. New Zealand's market share of wine in Korea is just over 1 percent.

Above all, the good news for Koreans is an expanded Working Holiday Scheme and short-term English language courses for students from rural areas.

"Each year a diverse group of more than 8,000 Koreans is coming to study English in New Zealand," Fearnley said.

Each year, New Zealand offers 150 new short-term English language training places for young Koreans from rural communities and allows 50 special primary sector training visas to allows Koreans to study and do work experience in the agricultural field.

Under the holiday scheme, 3,000 places are available annually allowing young Koreans to stay in New Zealand for up to a year. Before the FTA, 1,800 places were on offer.

In addition, the deal has established 200 places for skilled Korean workers seeking temporary employment in areas where New Zealand has a need for their skills.

To mark such a "valuable" trade agreement and the existing firm bilateral relations between the two countries, the New Zealand Embassy organized a month-long New Zealand-Korea festival in October.

"We wanted to show what a rich relationship we share with Korea across all sectors from defense through culture, education, tourism, creative industries, film, science, technology," the ambassador said.

Some highlights include: trade shows showcasing New Zealand wines and seafood products; the launch of a Korean-language Maori folk tales book; New Zealand tea tasting and high tea at TWG's flagship Tea Salon & Boutique in Seoul; and a piano recital by Korean-Kiwi classical pianist Jason Bae.

Asked if she thought the FTA is truly a "win-win" deal for both sides, Fearnley said, "Having competition within the market is good for the consumers and ultimately good for the industry, because it increases our productivity, so we embrace the concept."