Minister for Trade Andrew Robb has announced that the Korea-Australia Free Trade Agreement (KAFTA) was signed in Seoul on Tue 8.4.2014. Mr Robb expects the Agreement to be in force by the end of this year. On entry into force of the Agreement, 84% of Australia’s exports (by value) to Korea will enter duty free, rising to 99.8% on full implementation of the Agreement. Australia will remove its remaining tariffs on Korean goods on entry into force or over several years.
Significantly, under the Agreement, Australian accountants will be able to: establish offices in Korea to provide consultancy services on international and Australian accounting laws; and within 5 years will be able to work in, and invest in, Korean accounting firms.
Also, Australian financial services providers will be able to supply specified financial services on a “cross-border” basis, including investment advice and portfolio management services for investment funds, as well as a range of insurance and insurance-related services.
Other features of the Agreement include:
- Korea will eliminate tariffs immediately on entry into force for raw sugar, wheat, wine, and some horticulture.
- Korea will eliminate its 40% tariff on beef progressively over 15 years.
- Duty free quotas for cheese, butter and infant formula and high tariffs will be eliminated on many dairy products between 3 and 20 years.
- 88% of Australia’s manufactures, resources and energy exports will enter Korea duty free on entry into force of KAFTA, with all remaining tariffs phased out within 10 years.
- Australia will raise the screening threshold for Korean investments in non-sensitive sectors from $248m to id=”mce_marker”.078bn (the same as for Australia’s FTA with Japan). Australia will retain the ability to screen investments in sensitive sectors at lower levels.
[LTN 68, 9/4/14]