Farmers lukewarm, Key pragmatic on Korea FTA

PRIME Minister John Key says the free trade deal with South Korea was the best that could be achieved and rejects suggestions it will encourage Japan to play hardball on dairy in the Trans-Pacific Partnership (TPP) free trade talks.

Federated Farmers has been lukewarm about the deal, heading its press release ‘‘Korea Free Trade Agreement better than nothing’’. President William Rolleston said it was pleasing New Zealand was now on a level playing field with trade competitors in the Korean market.

But he said it ‘‘represents an absolute bottom line for the quality of outcomes for further agreements’’.

Key said the Government had taken the best deal it could. ‘There’s a degree of pragmatism about that. There are some reforms for dairy and outside dairy there are very wide-ranging reforms.’’

The Government could have decided not to go ahead because milk powders got only minor tariff reductions and there were also issues over deer velvet exports.

But that would have harmed other sectors, such as kiwifruit.

‘‘I don’t think any FTA is perfect.’’

The deal meant an immediate $65 million reduction in the $200m of tariffs faced by New Zealand in Korea.

Asked if it would affect Japan’s stance in the TPP talks, Key said: ‘‘I don’t think you can translate necessarily what happens in an FTA with South Korea in terms of what the settings of TPP would be.’’

Infant baby formula, butter and cheese were included in the Korean deal. ‘‘It’s really only milk powder and frankly we had to balance up with that whether it was worth walking away from what is a very significant trading partner.’’

He could not give Federated Farmers any assurance the TPP would not be worse than the Korean deal, because he did not know what the TPP would finally look like. ‘‘[But] we won’t sign a deal unless it is in New Zealand’s best interests.’’

New Zealand had won the same conditions as Europe, the United States, Australia and Canada, he said.

He did not take the opportunity to push the stalled free trade deal with Russia when he met President Vladimir Putin at the G20 in Brisbane.

‘‘That chance will always be there . . . because it’s pretty clear behind the scenes the Russian officials do want to advance the FTA.’’

Trade Minister Tim Groser was in Moscow and on the point of finalising the deal when Russia invaded Crimea, prompting New Zealand to put the deal on ice. Editorial Exclusions irk