The Korea-Australia free trade agreement (KAFTA) has been confirmed today, with “winners and losers” to emerge in time among manufacturers, according to the Australian Industry Group.
According to the Department of Foreign Affairs and Trade, merchandise imports from Korea were worth $9,203 million and exports $19,116 million in 2012-2013.
Trade minister Andrew Robb said that tariffs on major exports to Korea “will be eliminated”.
"Tariffs of up to 300 per cent will be removed on key Australian agricultural exports such as beef, wheat, sugar, dairy, wine, horticulture and seafood, as well as resources, energy and manufactured goods," said Robb in a statement.
He noted that automotive suppliers, some of whom incur tariffs of up to 8 per cent, and winemakers (15 per cent) would benefit immediately.
“However, the news is more ambiguous for manufacturers with winners and losers likely to emerge,” said Innes Willox, CEO of the Australian Industry Group, in a statement.
“Its overall impact on key parts of industry will only become apparent over time.”
For manufactures, tariffs of up to 13 per cent would be phased out over seven years and overall – according to the government’s economic modelling – exports would grow by 25 per cent over the next 15 years.
All tariffs for manufactured goods (not including energy and mineral resources or forestry
products) exported to Korea would be phased out over seven years.
The Ai Group noted that the big winners were those in agriculture, resources and services, with the gains for manufacturers to be known later.
“It appears that the KAFTA will have particular benefits for Australia’s agricultural and resource producers where often quite substantial tariffs have impeded the full potential of trade links,” said Willox.
“The agreement also appears to make important headway in improving access for Australia’s service exporters."