Prime Minister Tony Abbott has kicked off question time in Parliament this afternoon by confirming Australia is set to sign off on a free trade agreement (FTA) with Korea.
With the notable exception of rice, Australian agricultural exports to Korea will be soon exempt from import tariffs under the FTA.
Mr. Abbott said under the agreement, there would be significant new market openings in services and investment.
As part of the FTA, tariffs of up to 300 per cent will be eliminated on key Australian agricultural exports such as beef, wheat, sugar, dairy, wine, horticulture and seafood, as well as resources, energy and manufactured goods.
“Beef tariffs, I’m pleased to say, will be completely phased out over 15 years which will restore Australia’s competitive position in this key market,” Mr. Abbott told Parliament.
Trade Minister Andrew Robb said the benefits of the FTA start flowing immediately, and will be long-lasting.
$650m annual boost for exports
A statement released by the Prime Minister and Mr. Robb said independent modelling shows the FTA would be worth $5 billion between 2015 and 2030 and boost the economy by around $650 million annually after 15 years.
Agricultural exports to Korea will be 73 per cent higher after 15 years as a result of the FTA and overall exports to Korea will be 25 per cent higher resulting in the creation of more than 1700 jobs.
Bilateral trade between Australia and Korea reached $32 billion in 2012
Australia is the largest supplier of beef to Korea but our major competitor, the US, is already benefiting from beef tariff cuts from its 2012 FTA with Korea. In beef, the US currently has a 5.4 per cent advantage.
Australian cheese producers will gain duty-free access to Korea’s growing middle class market. Australian cheese exports currently face Korean tariffs of up to 36 per cent.
Australian sparkling, red and white wines are currently subject to a tariff of 15 per cent but wine from the US, EU and Chile enter duty free. The FTA will provide a boost to the wine industry, whose exports to Korea have been steadily decreasing since 2007.Back to News Page