KAFTA seals fair trade relationship between Australia and Korea

Korea-Australia Fair Trade Agreement (KAFTA) brings benefits to both Australia and Korea. This includes:

• Providing better access of raw materials for Australia
• Opening the Australian market to Korea
• Improving import patterns into Australia

Below are some of the additional benefits KAFTA brings to Australia and Korea.

Transitional tariff reduction on products entering Australia

KAFTA will allow 86% duty free export of Korean commodities into Australia upon implementation. This includes:

• Korean manufacturing
• Energy products
• Resources

Progressive phase out of manufacturing products

Within eight years, Australia will progressively phase out the remaining tariffs of most import sensitive manufacturing products. This includes:

• Motor vehicles and parts
• Chemicals
• Steel
• Plastics
• Clothing
• Footwear

Tariff reduction on vehicles

Andrew Robb, Federal minister for trade and investment, has further disclosed the following vehicle tariff reductions:

• 75% reduction on tariffs for small Korean cars
• Bigger cars tariff to be reduced over a period of three years
• Components tariffs to be eliminated over a period of three to five years

It is to be noted that KAFTA is protected by a bilateral safeguard mechanism. This addresses sudden import surge within the transitional period mentioned above.

KAFTA to deliver more jobs into Australia

KAFTA is also expected to deliver additional jobs into Australia. Thus, the government is already exerting effort to improve, enhance and innovate all of the country’s industry strengths. It is one of the strongest and complementary economic relationships for Australia in the Asia-Pacific region. As a comprehensive bilateral trade agreement it significantly frees Australia’s trade with its fourth-largest partner. KAFTA improves the competitiveness of Australia’s businesses in South Korea. Our exporters get improved market access for their goods with tariff removed from nearly all Australian exports. Under the agreement, our businesses are to receive the best treatment Korea has to offer.

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KAFTA seals fair trade relationship between Australia and Korea