Australian industry welcomes South Korea FTA

By Nicholas Robinson

- Last updated on GMT

Australia set to benefit from South Korea FTA
Australia set to benefit from South Korea FTA

Related tags South korea International trade Livestock

Australian beef and sheepmeat bosses are elated following the successful negotiation of a South Korea/Australia Free Trade Agreement (FTA), suggesting it will save the sector AU$1.25bn over 15 years.

Prior to the agreement, which was announced by the Australian Government earlier this month, Australia’s meat industry warned that lingering negotiations with South Korea could be detrimental to the sector.

However, the agreement will now see a 40% tariff removed from Australia’s AU$645m annual beef trade with Korea, bringing it close to the US’ beef tariff of 34.6%.

Stephen Kelly, the industry’s South Korea Taskforce spokesman, said the negotiations had been the priority of the Australian beef industry for several years. “It also sees the phasing-out of the 22.5% sheepmeat tariffs over 10 years,”​ he added.

Kelly explained the agreement, which was fast-tracked in a matter of months, will potentially save the country’s beef industry AU$1.25bn in the next 15 years. He said it was extremely positive and would help secure the ongoing supply of Australian beef for Korean consumers “in a highly competitive global protein market”.

Yet Kelly was dismayed at the US’ securing of an FTA with South Korea in 2012, which “means there will always be a tariff differential between Australian and US product of up to 5.3%”.

He was also concerned that “volume safeguards”​ in the agreement could be restrictive and explained: “Safeguard conditions in the agreement can mean that tariffs increase if export volumes exceed a certain level. However, industry notes that these safeguards are not applied automatically and is of the belief that they should be applied judiciously and not to constrain natural increases in trade.”

He added that it was now important to confirm the agreement quickly and said the differential in the tariff between Australian and US beef entering South Korea would grow to 8% in January next year.
Australia’s beef exports to South Korea in numbers:

  • 137,695 tonnes exported to South Korea in 2012-13, making it the third most valuable export market;
  • Beef exports to South Korea in 2012-13 worth AU$704m;  
  • Australian market share of beef imports was 54% in 2012-13.

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