KOREA–AUSTRALIA FREE TRADE AGREEMENT HANDS AUSTRALIAN BUSINESS AN EARLY CHRISTMAS GIFT

Joint statement by Kate Carnell, Chief Executive Officer, Australian Chamber of Commerce and Industry; Ian Birks, Chief Executive Officer, Australian Services Roundtable; Catherine Livingstone , President, Business Council of Australia; Brendan Pearson, Chief Executive, Minerals Council of Australia; and Brent Findlay, President National Farmers’ Federation.

Australian businesses will be able to take full advantage of opportunities with our fourth largest trading partner from tomorrow, 12 December 2014, the day the Korea–Australia Free Trade Agreement (KAFTA) enters into force.

Through KAFTA, the Australian Government has lifted the competitiveness of Australian businesses operating in Korea, after years of losing ground to businesses from the United States, Europe and Asia whose countries have already established preferential trade agreements.

Over the coming weeks, businesses across all sectors of the Australian economy will see a double-round of tariff cuts for exports into Korea. In addition to tariff cuts tomorrow, Australian exporters to Korea will enjoy a second stage of cuts on 1 January 2015.

KAFTA is an important agreement with one of Australia’s largest trading partners. It eliminates tariffs on almost all of Australia’s merchandise exports to Korea, including agricultural, resources and industrial goods. Australia’s services industries will enjoy new and guaranteed access in the large and growing Korean market. Australian consumers and manufacturers benefit from cheaper imported goods, including cheaper inputs into Australian manufactured goods.

The inclusion of investor-state dispute settlement provides certainty for Australian and Korean investors. As Australian businesses seize the opportunities from Asia and invest in Korea, the agreement will provide these companies more investment certainty overseas.

We congratulate Trade and Investment Minister Andrew Robb and the Australian negotiators for securing KAFTA’s entry into force before the end of the year.

We also thank the Opposition for providing its support to the agreement. Bipartisanship has been a hallmark of Australian trade policy and has been crucial for Australian progress.

The agreement will complement gains that will be made when the landmark Japan-Australia Economic Partnership Agreement soon comes into force. This is important as Japan is our second largest trading partner.

These FTAs, together with the agreement recently concluded with China, will help Australian businesses create jobs and prosperity by maximising Australia’s competitiveness in the world’s growth region. Australia’s future prosperity relies on engaging effectively with Asian economies in the region. With one in five Australian jobs related to trade, Australia’s trading performance makes a major contribution to increasing national living standards.

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