Two Korean tariff cuts to benefit Australian industries
The landmark Korea-Australia Free Trade Agreement (KAFTA) has passed into the parliaments of both countries, along with the exchange of diplomatic notes by the Australian and Korean governments agreeing to its entry into force.
The KAFTA means two tariff cuts for Australian industries - the first on 12 December and the second on 1 January 2015. These tariff cuts will benefit Australia’s agriculture, food, fisheries and forestry sectors.
“Korea is Australia’s third-largest beef market valued at $788 million in 2012. Australian beef exporters have had to face a 40% tariff on beef, but on 12 December it will fall to 37.3%, and then again on 1 January 2015 down to 34.7%,” said Agriculture Minister Barnaby Joyce.
“The beef tariff will be progressively eliminated over 15 years under this agreement - but the early entry into force gives us an accelerated start to the reductions and helps us make up ground faster with our US competitors.
“Australia’s important citrus trade will also benefit from the double tariffs cuts, with the high seasonal tariff dropping from 50% now to 37% on 1 January 2015. This will provide an immediate boost to the competitiveness of Australian citrus in Korea against competitors such as the US and Chile.”
A 3% tariff on sugar was eliminated on 12 December, helping to strengthen Australia’s competitive position as the largest sugar supplier to the Korean market.
“Korea is our fifth-largest export market with our agricultural exports valued at $2.3 billion.
“This agreement, along with those struck with our largest and second-largest agricultural export markets - China, valued at $9 billion, and Japan valued at $3.8 billion - will bring benefits to many Aussie producers,” Minister Joyce said.
“The KAFTA means our beef, dairy, grains, sugar, horticulture, seafood and wine sectors will all achieve better access.
“While some commodities are excluded, this agreement represents the best outcome we could achieve at this time and we look forward to our new relationship prospering.”
More information about the KAFTA is available from www.dfat.gov.au/fta/kafta.
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