The second reading debate of the Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Bill was interrupted when the House rose at 6pm with Labour indicating they would support the bill with one misgiving.
Associate Trade Minister Todd McClay said the bill brought into force the trade deal with Korea which would bring significant gains for exporters due to the removal over time of tariffs on approximately 98 percent of New Zealand’s current exports to Korea.
It is estimated that New Zealand exporters currently pay around NZ$229 million in duties each year to Korean authorities. On entry-into-force tariffs on 48.3 percent or NZ$793.7 million of New Zealand’s current exports to Korea will be eliminated. This includes wine, cherries, hides and skins, some forestry products, some aluminium and many industrial goods exports will become duty-free on EIF.
All duties on New Zealand kiwifruit exports to Korea (worth NZ$44.3 million in the year ending June 2014) will be eliminated over five years, with an estimated annual duty saving to New Zealand of around NZ$20 million.
Labour’s David Parker said Labour would support the legislation as the Government had almost got the deal right as it did provide benefits for exporters and the economy. The deal did not require any changes to legislation other than tariff law and the sovereignty of Parliament was not controlled.
Labour was not happy about the limitations the deal put on future Governments to change foreign investment rules applying to Korea, the Government had failed to negotiate to allow for the ban of house sales to foreigners and this would now flow through to all countries New Zealand had trade deals with such as China.
