The so-called free trade deal with Korea excludes frozen squid, which will continue to suffer a 22 percent tariff.

The FTA announced by Prime Minister John Key at the weekend is overall disappointing for seafood, according to Seafood New Zealand chief executive Tim Pankhurst.

“While there are some improved trading conditions for some seafood in the first three years, including salmon and some mussel products, it is disappointing the significant squid trade has been excluded entirely from any benefit,” he said.

Current seafood exports to Korea are worth about $50 million annually, down from a high of $70 million.

Korea has a strong seafood consumption culture but growth of New Zealand’s export business has been held back by tariffs between 10 percent to more than 20 percent.

The Korea FTA was five years in the making but the South Koreans have insisted on excluding some currently traded products or resorted to setting a quota for others.

Korea operates a two tier system on fish caught in New Zealand waters.

If it is from a New Zealand flagged vessel, the catch faces the full effect of tariffs. But if the fish is landed in New Zealand from a Korean flagged charted vessel, it enters the Korean market tariff free, classed as domestic product.

The foreign charter vessel legislation introduced this year will require all vessels fishing in New Zealand waters to be New Zealand flagged from 2016.

Exports of squid in 2013 accounted for 28 percent of the Korean trade.

Exports of frozen mussels on the half shell will be restricted to an annual quota of 1600 tonnes tariff free. Exports over this quota will have a 20 percent impost. The quotas will grow annually by 6 percent for the next 16 years, equivalent to a 150 percent increase over that time.

Competing frozen mussels from Chile will continue to be allowed to enter the Korean market tariff free without any restriction on trade volume.

For more information:

Tim Pankhurst, CE of Seafood New Zealand, tel 021 674 133