The impact of tariffs and free trade agreements on Zespri - Asia New ...

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The impact of tariffs and free trade agreements on Zespri - Asia New ...

ong>Theong> ong>impactong> ong>ofong> ong>tariffsong> ong>andong> ong>freeong> ong>tradeong> ong>agreementsong> on Zespri© -

Teacher’s answers

ZESPRI® Kiwifruit is sold to more than 55 countries around the world. ong>Theong> largest markets

are in Asia, Europe ong>andong> the United States.

Source: http://www.zespri.com/about-zespri/faqs.html

1. Using the table below, draw a bar/column graph ong>ofong> the top ten markets for

Zespri© in 2010.

Country

% ong>ofong> total

ong>tradeong>

Japan 18

Spain 12

Germany 9

China / Hong Kong 9

Netherlong>andong>s 7

South Korea 7

Taiwan 6

France 5

United States 4

Italy 1

©Asia New Zealong>andong> Foundation

NCEA Level 1: Business Studies, Lesson 8 1


2. Calculate the estimated cost ong>ofong> ong>tariffsong> for each country (round to the nearest

dollar).

Country

Tariff

(%)

Value ong>ofong> exports

(NZ$ FOB 2010)

Canada 0.0 2,958,977

China 13.3 74,936,620

European Union 8.8 382,033,958

French Polynesia 10.0 683,367

India 30.0 1,806,906

Indonesia 0.0 4,190,664

Japan 6.4 271,126,992

Malaysia 0.0 10,413,769

Mexico 20.0 6,053,861

New Caledonia 14.0 917,981

Philippines 3.0 1,276,137

Republic ong>ofong> Korea 45.0 64,159,018

Saudi Arabia 0.0 290,356

Taiwan 20.0 66,754,442

Thailong>andong> 0.0 2,123,169

United Arab Emirates 0.0 3,337,905

United States ong>ofong> America 0.0 29,333,119

Vietnam 15.0 1,021,742

Estimated cost ong>ofong> tariff

0

9,966,570

33,618,988

68,337

542,072

0

17,352,127

0

1,210,772

128,517

38,284

28,871,558

0

13,350,888

0

0

0

153,261

©Asia New Zealong>andong> Foundation

NCEA Level 1: Business Studies, Lesson 8 2


Tariff %

Canada

China

European Union

French Polynesia

India

Indonesia

Japan

Malaysia

Mexico

New Caledonia

Philippines

Republic ong>ofong> Korea

Saudi Arabia

Taiwan

Thailong>andong>

United Arab Emirates

United States ong>ofong> America

Vietnam

3. Draw a column graph ong>ofong> the tariff rates ong>andong> countries using the information in the

table above. Draw countries on the horizontal axis ong>andong> tariff % on the vertical axis.

Tariff % on ZESPRI kiwifruit

50.0

40.0

30.0

20.0

10.0

0.0

Countries

4. Explain what the benefit ong>ofong> the Free Trade Agreement with China (NZ-China FTA)

will be to Zespri© in the future. (Hint: Use the websites below to find information)

http://www.mfat.govt.nz/Trade-ong>andong>-Economic-Relations/Trade-Relationshipsong>andong>-Agreements/China/index.php



http://www.chinafta.govt.nz/5-FAQ/index.php

http://www.chinafta.govt.nz/5-FAQ/index.php#Benefits

ong>Theong> aim ong>ofong> the FTA is to open up economic opportunities for New Zealong>andong> business in China, ong>andong>

to boost commercial ties with our third-largest trading partner.

China is active in negotiating FTAs with other countries, such as Australia, ong>andong> the FTA will help

NZ exporters ong>andong> investors to maintain competitiveness in the China market.

ong>Theong> FTA will assist in raising the prong>ofong>ile ong>ofong> NZ companies in China.

Over the first 9 years ong>ofong> the agreement, ong>tariffsong> on kiwifruit will be eliminated (saving Zespri©

close to NZ$10 million in the calculation above).

ong>Theong> FTA sets up a framework to recognise technical requirements as equivalent ong>andong> accepts the

results ong>ofong> each other’s procedures for sampling, testing ong>andong> inspecting goods.

ong>Theong> FTA also has procedures to resolve sanitary ong>andong> phytosanitary (SPS) issues, which helps to

manage issues around the prevention ong>ofong> the introduction ong>ofong> pests ong>andong> diseases ong>andong> ensuring food

safety.

©Asia New Zealong>andong> Foundation

NCEA Level 1: Business Studies, Lesson 8 3

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