Rotorua Weekender: Trade important for our local industries
This week, the New Zealand-Korea Free Trade agreement moved a step closer to entering into force, with a further discussion and vote in Parliament. The deal levels the playing field for New Zealand exporters and ensures that our products are competitive in the Korean market.
As a small trading nation, it’s important that local exporters get the best deal when their products leave our shores. High quality free trade agreements that remove or significantly reduce tariffs on exports are important, because they reduce costs and remove unfair barriers to entry into lucrative markets overseas.
Trade is a big contributor to the New Zealand economy. It is responsible for many jobs locally in the Rotorua electorate. Industries such tourism and export education, horticulture, sheep and beef, and forestry are leading the way in our economy. Securing better access to big markets is important to these industries, giving them certainty to invest and grow.
The New Zealand-Korea Free Trade Agreement will provide a further boost for local business and New Zealand’s international competitiveness. Last year tariffs for all exports into Korea from New Zealand totalled $229 million, all paid by exporters around New Zealand. The agreement means significant savings for local businesses when they export their products to Korea, the world’s thirteenth largest economy. Overall $65 million will be saved by Kiwi businesses in the first year alone, allowing them to reduce their costs, be more efficient, and create more jobs to keep up with demand for their products.
Tariff reductions are especially good news for our local forestry industry that will no longer have to pay tariffs at the border when their products enter Korea. In total, New Zealand exported $503 million worth of forestry products to Korea in 2014. Over the next ten years, these products will go over the border without attracting tariffs. This is a major saving for the industry, and will ultimately mean more and better paying jobs, boosting the income of New Zealanders.
Free Trade Agreements are good for business. They mean savings for exporters, more people to sell our high quality products to, and more economic activity in our region. We are a trading nation; we won’t become more prosperous by selling to ourselves. We need high quality access to important markets around the world, the Korea FTA helps deliver this.