Ask the Experts

PwC Partner Mike Bignell – April 2015

I’m looking at expanding my business overseas. With New Zealand’s Free Trade Agreement with Korea recently established and talk of one being developed with India, what benefits will having a Free Trade Agreement in place provide for my business over other international markets?

Under Free Trade Agreements (FTAs) New Zealand exporters gain improved access to international markets as well as reduced or eliminated levies, which helps level the playing field for New Zealand businesses competing for market share.

If we look at Korea as an example, they are already our sixth-largest export destination, with New Zealand exporting more than $2 billion worth of goods and services there in the year to June 2014. However, New Zealand exports to Korea currently cost businesses around $229 million a year in duties.

FTAs allow duty free access, and in the agreement with Korea, this will be implemented through a phased approach over time and is set to save New Zealand businesses an estimated $65 million in the first year alone. This will help New Zealand businesses out a great deal as they’ll now be able to compete with exporters from other countries that already have preferential tariff access for their goods. In Korea, these include major players such as the United States, Chile and the European Union.

FTAs lift the profile of New Zealand businesses and usually apply across all industries, allowing our exporters to further grow their presence in the market. South Korea is one of the most affluent populations in Asia and its 50 million people appreciate the clean, green image of New Zealand however currently only know a few New Zealand brands so the opportunities there and elsewhere for New Zealand businesses are ripe for the picking.

As published by Fairfax in April 2015.

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