Kiwifruit growers are one step closer to saving millions of dollars, thanks to the passage through Parliament of the Tariff Amendment Bill.

The bill is a significant step towards a Free Trade Agreement with South Korea, which currently puts a 45 per cent duty on imports of New Zealand kiwifruit while fruit from rival Chile enter duty-free.

Zespri chief executive Lain Jager. Photos: Supplied.

The Korean Parliament now needs to complete its consideration of the Free Trade Agreement to bring it into force, says New Zealand Kiwifruit Growers president Neil Trebilco, who is hopeful it will happen in time for the 2016, export season.

'The agreement will eliminate a 45 per cent tariff on New Zealand kiwifruit over five years, creating significant savings for growers.

'The agreement will also bring about parity with Chilean competitors who have been on a zero tariff since concluding their own free trade agreement in 2004,” says Neil.

'The duty Zespri and NZ kiwifruit growers pay to South Korea is the highest in any market that we have around the world so this is very welcome news. It will enable the industry to better compete in the market.

'It has been a long negotiation and we thank both governments for their efforts.”

Korea is Zespri's seventh largest market and the steps to ratify a free trade agreement are also welcomed by Zespri which says if it came into play this year it would mean a 33 per cent reduction in tariffs on exports of New Zealand kiwifruit to South Korea for next year's kiwifruit season.

During 2014, Zespri growers paid approximately $22 million in tariffs, with the rate set at 45 per cent. The tariff for kiwifruit will reduce to zero over the next five years.

'We congratulate all those who have worked tirelessly to achieve this result,” says Zespri chief executive Lain Jager.

'For Zespri, the elimination of the tariff means that we will be able to offer more competitive pricing to Korean consumers and therefore maintain a competitive position in the market as well as providing greater returns to New Zealand kiwifruit growers.

'This is a fantastic outcome for the industry and will ensure that South Korea remains a priority market for Zespri.”

Zespri is projecting annual sales volume growth in Korea of more than 10 per cent during the next five years.

'Zespri has worked with the governments of New Zealand and South Korea for a number of years at all levels to encourage the FTA process. It follows recent successes by the government of New Zealand in achieving tariff elimination through agreements with China and Taiwan.

'We now look forward to further progress by the government on other trade initiatives. Particularly the Trans-Pacific Partnership, ”says Lain.

About Zespri in South Korea

• South Korea is Zespri's seventh-largest market in the world.
• Zespri is expecting sales volume growth in South Korea of more than 10 per cent a year during the next five years.
• Zespri has also invested in developing kiwifruit production in South Korea and has more than 100 hectares of producing kiwifruit orchards supporting its 12-month supply to key markets.
• The current tariff rate for import of kiwifruit into South Korea from New Zealand is 45 per cent.