Korea

18
Country starter pack
Introduction to Korea
KAFTA is one of the most comprehensive trade deals
completed by Australia with any nation, delivering big
improvements in market access and tariff elimination
or reduction for exporters of goods and services. It
also substantially improves investment protections for
Australians doing business with Korea. The agreement
secures Australia’s competitive position in the Korean
market, where some competitors have already been
enjoying preferential access. Specifically, the agreement
helps level the playing field for Australian exporters
competing with those from the US, New Zealand, the
EU, Chile, and the Association of South East Asian
Nations (ASEAN), who benefit from existing and new
trade deals with Korea. Benefits for Australian businesses
through KAFTA include:
Focusing on inbound trade from Korea, the nation is
Australia’s ninth largest foreign source of goods and
services, with imports totalling over $12 billion in 2013-14.
The primary imports from Korea are refined petroleum,
passenger motor vehicles, and pumps and associated
parts.
With such a growing trade relationship, negotiating a
free trade agreement was a natural progression. The
Korea Australia Free Trade Agreement (KAFTA) came
into force on 12 December 2014, after being signed by
the two governments in April of that year. KAFTA was
Australia’s first free trade agreement to be concluded
with a major trading partner in North Asia. Agreements
with Japan and China soon followed making up the
“trifecta” of trade agreements announced in 2014.
Together, these three economies represent more than
50 per cent of Australia’s exports. The further opening up
of these major markets will provide a potentially gamechanging
boost to Australia’s prospects of competing
globally in the years ahead.
• After initial entry into force, 84 per cent of
Australia’s goods exports (by value) can enter Korea
duty-free. By full implementation, tariffs on 99.8
per cent of Australian exports (by value) to Korea will
have been eliminated.
• Australia’s agriculture exporters are now permitted
to compete in this otherwise highly protected, but
lucrative market.
• New markets are opening up in Korea for Australian
law firms, accountants and telecommunications
providers. It also guarantees access in a wide range
of other sectors including education and financial
services.
• KAFTA provides greater protection and certainty to
Australian investors, including the ability to directly
enforce investment obligations through an Investor-
State Dispute Settlement mechanism.
• Korea guarantees access for Australian business
people (and their families) to stay in Korea for up to
two years.
• A Professional Services Working Group was
established to facilitate cooperation and mutual
recognition between professional bodies in both
countries.
• Australian suppliers are guaranteed access into the
Korean Government procurement market and ensure
transparent and fair procurement processes.
• KAFTA will support business in harnessing the
efficiencies of electronic commerce, while ensuring
the protection of consumers engaging online.