DCANZ welcomes the conclusion of the NEW ZEALAND – KOREA free trade agreement

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The Dairy Companies Association of New Zealand (DCANZ) has welcomed the successful conclusion of Free Trade Agreement (FTA) negotiations between New Zealand and Korea.

The 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 very well with the results of the previous FTAs that Korea has concluded with the EU, US and Australia.

DCANZ chairman, Malcolm Bailey, said that 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,” said Bailey.

New Zealand is a longstanding and trusted supplier of dairy products to Korea. Korean dairy consumption is continuing to expand 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,” said Bailey. “New Zealand exporters currently face import tariffs on dairy of between 8 and 176 percent. 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. “New Zealand’s growing suite of trade and economic co-operation agreements is testament to the commendable bipartisan approach successive New Zealand Governments have taken to trade liberalisation. This approach continues to be to the benefit of New Zealand as a whole, as well as the dairy sector,” Bailey said.

For further information contact:
Malcolm Bailey, Chairman,
Kimberly Crewther, Executive Director

About DCANZ :

The Dairy Companies Association of New Zealand (DCANZ) was formed in July 2003 to co-ordinate and represents the collective public policy interests of its member dairy companies.

Its members comprise , Tatua Co-operative Dairy Company Limited, Westland Milk Products, Fonterra Brands (NZ) Ltd, Goodman Fielder New Zealand Limited, Synlait Milk Limited, Open Country Dairy Limited, Miraka Ltd, Fonterra Co-operative Group Limited, Danone-Nutricia NZ Limited, Oceania Dairy Limited, Yashili NZ Dairy Co Ltd and Dairy Goat C