Australian beef is the big winner from the free trade negotiations with the Republic of Korea, putting Australia back on a level-playing field with the United States, says UNSW’s Australian school of Business’ Tim Harcourt. “South Korea is not a hermit economy, it is a hub economy. Beef is the big success story, but the free trade agreement also gives Australia access to areas like the rest of Asia.”
The Federal Government is releasing the full details of its free trade agreement today. The deal with South Korea was struck in December last year, but it was kept secret until now, with details extending to 1800 pages.
Tim Harcourt, the J.W. Nevile Fellow in Economics at the Australian School of Business, said “the agreement should be open and transparent – not kept secret until now. Parliament should be permitted to scrutinise it in both countries. However there is no doubt of the net overall benefits for all Australians.”
The deal is yet to be ratified by either country, but he says when it is it will give a huge boost to trade. “Australian beef had a huge leap in market share during the BSE crisis which put a severe dent in the US beef export market to Korea, and by reducing tariffs I expect the same again, with significant potential for growth.”
The agreement will eliminate tariffs on Australia¹s major exports to Korea, open new markets in services and investment, and tariffs of up to 300 per cent will be eliminated on key Australian agricultural exports such as beef, wheat, sugar, dairy, wine, horticulture and seafood, as well as resources, energy and manufactured goods.
“South Korean needs food security and energy security. This deal gives it to them,” said Tim Harcourt. “The free trade negotiations represent the first significant international win for the Federal Government in its ‘open for business’ agenda, following criticism over the decision to block foreign investment in Graincorp decision. Now the Government must focus its attention on Japan and China if it wants to be taken seriously.”
Korea is our fourth-largest trading partner and long-time diplomatic and economic ally. “From its significant role, alongside Australia, in the formation of APEC in 1989, to its hosting of the 2008 G20 summit – and now to a free trade agreement, the Republic of Korea has been and will remain a good friend and trading partner of Australia,” he said.
“For Australian exporters – from resources, to beef to financial services – and investors, Korea is going to be an important economic market for Australia in years to come.”
For further comment
Tim Harcourt on 02 9385 3816 or 0408 485 479.
Julian Lorkin: 02 9385 9887