Through KAFTA, the Australian government has lifted the competitiveness of Australian businesses operating in Korea, after years of losing ground to businesses from the US, 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, Australian exporters to Korea will enjoy a second stage of cuts on 1 January 2015.
Local export, service industries to benefit
Business Council of Australia (BCA) said KAFTA was an "important agreement" with one of Australia's largest trading partners, in a recent statement.
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.
Bipartisanship "crucial" for progress
BCA praised Trade and Investment Minister Andrew Robb, Australian negotiators, and the Opposition for securing KAFTA's entry into force before the end of 2014, saying: "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 with Japan Economic Partnership Agreement – Australia's second largest trading partner – soon comes into force.
BCA's statement concluded: "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."
