8 December 2006 Media Statement
Embargoed until 3pm

NZ-Korea business ties helped by joint agreement

New Zealand businesses will find it easier to establish in Korea, following today's signing of a Memorandum of Understanding between government agency New Zealand Trade & Enterprise and the Korea Trade & Investment Promotion Agency (KOTRA), Economic Development Minister Trevor Mallard said.

Under the terms of the agreement, the two agencies will share market information and work together to assist New Zealand and Korean companies to develop business partnerships.

"Having this in-market support available will be a real help to New Zealand businesses looking to pursue opportunities in what is our sixth-largest export market," Trevor Mallard said.

"In the past ten years, the value of New Zealand exports to Korea has been steady at more than $1 billion per year, but this agreement gives us the opportunity to drive growth, particularly in the information communications, biotechnology and creative sectors.

"In the past couple of years, some New Zealand companies have already begun to develop closer links with Korean companies, as customers, as suppliers, and as partners, and the collaboration between NZTE and KOTRA will help other businesses to do similar," said Trevor Mallard.

"Pooling our resources in this way will benefit both our economies. Improving international connections in this way is also an important part of the government's commitment to transform New Zealand into an export-led, high wage innovative economy."

As well as increasing the flow of goods and services between the two countries, the agreement also aims to attract direct investment. New Zealand companies meeting certain criteria will have access to Invest Korea Plaza, a KOTRA-run business incubator facility that provides support services and advice to companies looking to set up operations in Korea.

The memorandum of understanding between NZTE and KOTRA was signed today by NZTE chief executive Tim Gibson and KOTRA president and CEO Hong Ki-Hwa, who is in New Zealand as part of a delegation led by South Korea’s President, Roh Moo-hyun. It replaces the previous agreement between legacy organisations the New Zealand Trade Development Board and the Korea Trade Promotion Council. The signing was witnessed by Trevor Mallard and the Minister of Commerce, Industry and Energy for Korea, Mr Sye Kyun Chung.

Background information follows.

How much trade does NZ currently do with Korea?
• In the 2005/2006 year trade between our two countries was worth slightly more than $2 billion.
• New Zealand exports to Korea totalled $1.16 billion; imports from Korea totalled $1.06 billion.
• Over the past four years, the value of New Zealand exports to Korea has been stable, while imports have increased by about a third.

What are the major goods and services traded?
• New Zealand to Korea: Wood, meat, dairy, aluminium, kiwifruit and seafood.
• Korea to New Zealand: Electronics, cars, petroleum, machinery.
• Korea is New Zealand’s second-largest education market (15,000 Korean students per year) and fifth largest source of tourists (more than 100,000 per year).

How will this initiative benefit New Zealand businesses?
• KOTRA exists to promote trade with and investment in Korea. KOTRA will help introduce New Zealand companies to potential Korean business partners, as well as providing local market information and other support services and facilities.
• NZTE and KOTRA will also work together to organise business missions, seminars and workshops to explore opportunities for New Zealand businesses in Korea - and for Korean businesses in New Zealand.

How will this initiative benefit Korean businesses?
• Very similar to the support KOTRA is providing: primarily access to local market information and assistance in linking with potential partners, customers, and suppliers.

Are any particular types of business being targeted?
• A wide range of businesses could potentially benefit from this agreement.
• In line with the government’s economic transformation agenda, we expect activities and initiatives to focus on high growth sectors including information, communications and telecommunications, digital content, creative, biotechnology and food & beverages.

How can New Zealand businesses access this support?
• Initially through NZTE, in some cases New Zealand companies will deal direct with KOTRA.

What sort of companies does NZTE hope to attract to New Zealand?
• Companies which can assist the development of local businesses by providing resources such as capital, complementary new technologies, and access to new markets.

Ends

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