23 Jul 2013

Exporters look to PM for progress on Korean FTA

3:33 pm on 23 July 2013

New Zealand primary exporters will be hoping the prime minister can give free trade talks with South Korea a hurry-up when he visits there this week.

John Key arrives in the country on Thursday for Korean War commemorations and trade talks.

Mr Key has acknowledged the lack of progress in the free trade negotiations sInce they started in 2009.

"Korea is our fifth largest market and we're effectively going backwards in Korea because they have signed free trade agreements with both the United States and Europe."

Mr Key says that puts New Zealand exporters at a real competitive disadvantage and so it's crucially important to negotiate an FTA.

The aim of this trip he says is to get sign-off on a FTA closer to the finishing line.

Mr Key says opposition from the powerful farmer lobby in South Korea remains one of the biggest obstacles to an agreement.

New Zealand's new agricultural trade envoy, Mike Petersen, shares the prime minister's concern about the lack of progress.

He says South Korea is an important market for New Zealand, especially for beef and horticulture products such as kiwifruit and squash.

But he says its tariffs are among the highest imposed on New Zealand goods.

"We really want to do more business with Korea out of New Zealand, but the cost of doing business with Korea is very, very high."

He says the beef and horticulture sectors faces tariffs of 40%, and by comparison the US has a 5.3% advantage.

Mr Petersen says the tariffs on New Zealand's $200 million a year meat exports to South Korea add up to more than $60 million.