Korea New Zealand Free Trade Agreement: The Benefits and Challenges
New Zealand and Korea have been trading partners for many years, but the recent signing of the Korea New Zealand Free Trade Agreement (KNZFTA) on December 20th, 2015 has taken this relationship to a new level. The agreement provides an opportunity for both countries to expand their trade and investment opportunities.
The KNZFTA eliminates tariffs on 96% of New Zealand`s exports to Korea and 100% of Korea`s exports to New Zealand. This will give New Zealand access to Korea`s large consumer market and provide a competitive advantage over other countries that do not have a free trade agreement with Korea.
Similarly, Korea will have access to New Zealand`s high-quality agriculture and food products, including beef, dairy, and wine. The agreement also includes provisions for the protection of intellectual property, investment, and government procurement.
The KNZFTA is expected to generate significant economic benefits for both countries. According to a study by the New Zealand Ministry of Foreign Affairs and Trade, the agreement will increase New Zealand`s exports to Korea by $65 million per year and create approximately 1,700 new jobs over 15 years.
However, there are also some challenges that need to be addressed. One of the main concerns is the impact of the agreement on local industries, particularly in Korea. Some Korean industries may not be able to compete with the lower-priced imports from New Zealand, which may lead to a loss of jobs. The Korean government has promised to provide support to affected industries through compensation and retraining programs.
Another challenge is the potential impact on the environment. New Zealand`s agriculture industry has been criticized for its high greenhouse gas emissions and other environmental issues. The agreement includes provisions for environmental protection, but it remains to be seen how effective these will be in practice.
In conclusion, the KNZFTA represents a significant opportunity for both New Zealand and Korea to expand their trade and investment opportunities. However, it also poses some challenges that need to be addressed to minimize the negative impact on local industries and the environment. As the agreement is implemented, it will be important to monitor its impact and make any necessary adjustments to ensure that the benefits are maximized while the challenges are minimized.