The signing of the New Zealand – Korea FTA is welcome news for New Zealand exporters. South Korea is New Zealand’s fifth largest export market and the FTA will bring tariff savings to a range of sectors that have been suffering under high Korean import tariffs. As with any FTA, the media has been awash with news articles that praise the benefits that the FTA will bring, but which typically lack any details about how exporters can take advantage of the FTA.
It is important to understand that FTA’s need to be leveraged at the importer end. But exporters should still take the initiative to work with their Korean partners to ensure tariff savings are actually claimed. It doesn’t happen automatically.
I have experienced countless occasions where very large importers with significant compliance divisions have little or no understanding about how to leverage FTAs in their country. Unawares, they end up paying unnecessarily high tariffs.
If your company is exporting to Korea, consider taking the following steps:
1. Advise your Korean partner about the FTA
Korea has signed a multitude of FTAs recently and because of New Zealand’s size it would be fair to assume that we are not getting as much air time as the Gulf Countries, Australia, Canada and China. Your partner simply knowing that their country has a FTA with New Zealand is the first step.
2. Provide your Korean partner with product information
The key variable in determining the import tariff payable under the FTA is your products HS Code (tariff code). Every type of product has a tariff code for Customs purposes and your product needs to be classified under the code that most accurately fits your product.
Providing your partner with the right information will allow them to confirm the tariff codes for your product with their local Customs body.
3. Provide your Korean partner with the FTA tariff schedule
All FTAs include a tariff schedule that outlines the import tariffs payable under the FTA on specific products.
If you provide this schedule to your partner, they can then verify the tariff payable.
Contact: Cameron Gordon | e. email@example.com | NZ ph. 64 9 889 0041 | SG ph.+65 3 159 0657