Australia, South Korea Nearing FTA Conclusion

by Mary Swire, Tax-News.com, Hong Kong

02 June 2010

South Korea and Australia began finalizing issues surrounding tariff concessions, investment, services and dispute settlements during the fifth round of free trade negotiations, held over a five-day period, ending on May 28.

In an address to reporters at the opening of the negotiations, Australian Trade Minister, Simon Crean noted that discussions between the two countries have been developing “extremely positively and quickly” since talks were first launched in May 2009. “[South Korea] wants to make that jump to a developed nation beyond the manufacturing sector sooner, that happens to suit our agenda,” he explained.

Crean explained that the Free Trade Agreement with South Korea is one of three such agreements the Rudd government is pushing to conclude. He told reporters that entering into bilateral agreements, also with Japan and China, would pave the way for the conclusion of a multilateral pact, to liberalize trade on a regional scale.

According to statistics from the Korean Trade Ministry, bilateral trade reached USD19.9bn in 2009, with South Korea posting a trade deficit of USD9.5bn. Crean said such an agreement would include lower tariffs for the Australian beef and automotive sectors, but admitted the area was a “sensitive one” in discussions.

South Korea has free trade pacts with Chile, Singapore, India, the Association of South East Asian Nations, and the European Free Trade Association, comprising of Switzerland, Liechtenstein, Iceland and Norway. In addition, South Korea has a signed-but-not-yet-ratified agreement with the United States, and has initialled a similar agreement with the European Union.

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