Thursday, April 10th, 2014
SEOUL, KOREA - Korea and Australia have formally signed a free trade agreement on April 8. This is the first FTA for both governments after inauguration of new administrations in respective countries. The pact has yet to pass the parliamentary ratification to take effect. Under the terms of the FTA, Korea will have to eliminate import duties within ten years for 94.3 percent of import goods. As for Australia, it would have to remove tariffs on all import items within five years.
President Park Geun-hye said in a press conference held after the summit meeting with Australian Prime Minister Tony Abbott in Seoul, "The Korea-Australia Free Trade Agreement will bring about visibly positive effects in bilateral trade, investment, job creation, and market expansion. In addition, it will upgrade the overall relationship between the two countries."
"Some of the highlights of the FTA include the abolition of tariff on automobiles that account for 25 percent of Korean exports to Australia and the accelerated screening on investment cases below US$1 billion," she added.
As for beef imports from Australia, the current tariff rate of 40 percent will be phased out in 15 years until 2030 by 2.6 percent a year. In the long run, the low-cost Australian beef is forecast to dominate the Korean beef market, displacing domestic cattle farms.