Australia Has Concluded Negotiations for a FTA with The Republic of Korea

Australia has concluded negotiations for a Free Trade Agreement (FTA) with the Republic of Korea, its third-largest goods export market and fourth-largest trading partner, Prime Minister Tony Abott and Minister for Trade and Investment Andrew Robb said in a joint media release.

“As a result of the Agreement, tariffs will be eliminated on Australia's major exports to Korea and there will be significant new market openings in services and investment. The FTA translates to higher economic growth and more jobs for Australians,” the release said.

“The benefits of the FTA start flowing immediately and will be long-lasting. Independent modelling shows the Agreement would be worth Au$ 5 billion between 2015 and 2030 and boost the economy by around Au$ 650 million annually after 15 years,” the statement said.

However, some sectors like textiles and clothing may face increased competition from imports of Korean products, according to the Department of Foreign Affairs and Trade, Government of Australia. This impact will be in line with the progressive liberalisation already underway in the Australia economy.

While the negotiations for KAFTA were concluded between Minister Robb and his Korean counterpart, Trade Minister Yoon, earlier this week, the Agreement will be signed and come into operation following domestic approval processes in Australia and Korea.

The Korea-Australia FTA (KAFTA) will secure Australia's position in a major market where competitors like the United States, European Union and ASEAN countries are already benefitting from preferential access.

In 2012, bilateral trade between Australia and Korea reached Au$ 31.9 billion. Of this, Australian exports to Korea were valued at Au$ 21.6 billion, accounting for over 7 per cent of all Australian exports, while Australia’s imports form Korea stood at Au$ 10.3 billion.

Bilateral investment between Australia and Korea has grown significantly over the past decade. At the end of 2012, total Korean investment in Australia was Au$ 12 billion, up from Au$ 637 million in 2002. Over the same period, Australian investment in Korea increased more than three-fold, from Au$ 3 billion in 2002 to Au$ 10.4 billion in 2012.