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FTA between Australia and South Korea

FTA between Australia and South Korea

The Prime Minister of Australia Tony Abbott and the South Korean President Park Geun-hye approved in Seoul on April 8th, the signing of a bilateral free trade agreement (FTA).

In a joint news conference the South Korean President said that: "The South Korea-Australia FTA is a comprehensive, high level FTA. In addition to having a tangible impact on drawing trade, investment and on expanding jobs and markets, the FTA will help take the full range of our relationship to a higher level."

According to Mrs. Park Geun-hye statements once the FTA takes effect, automobile tariffs will be removed. Automobile exports account for 25% of Korean exports to Australia and Australia is South Korea’s biggest outbound investment destination for resources development and its dominant provider of natural gas resources.

Cars imported to Australia from South Korea with engines up to 3 litres had to pay a 5% tariff, but with the FTA the tariff will be removed. The South Korean President also noted that within 3 years, duties on other core exports to Australia will be removed, including those on general machinery, automobile parts and household appliances.

The FTA will benefit Australia in the agricultural, services, and natural resources sectors. It is estimated, that within the next 5 years Australia will become the primary liquefied natural gas exporter to South Korea.

Australia will be aiming to put its exporters on equal ground to their U.S and EU rivals, acting on from the FTA’s signed by South Korea with the EU and the US.