South Korea Ratifies FTA with New Zealand

This week South Korea’s National Assembly approved the Korea-New Zealand Free Trade Agreement, which was finalized in March. Under the agreement, Korea’s tariffs on New Zealand beef (currently 40 percent) are eliminated over 15 years, but with a product-specific safeguard. New Zealand beef entering Korea will essentially be on the same track as Canadian beef, with a tariff of 37.3 percent upon implementation and a safeguard of 37,000 metric tons (mt) for the first year.

New Zealand is Korea’s third-largest beef supplier, but its market share (by import value) has fallen to 5 percent and ranks a distant third behind Australia (54 percent) and the United States (40 percent). Through October, New Zealand reported beef/beef variety meat exports to Korea of 21,871 metric tons (mt), down 11 percent year-over-year. Export value was $85.2 million, down 20 percent. Korea was the third-largest value market for New Zealand beef as recently as 2012, but fell to sixth-largest this year.

Korea’s import duties on New Zealand lamb and sheep meat (currently 22.5 percent) are eliminated over 10 years under the FTA.

The Korean National Assembly also approved free trade agreements with China and Vietnam this week. While neither agreement is expected to impact red meat trade in Korea, the Korean government approved about $865 million in direct financial support for farmers and fishermen impacted by the Korea-China FTA.