HOW KAFTA WILL AFFECT IMPORTS TO AUSTRALIA FROM KOREA
The new Korea-Australia Fair Trade Agreement (KAFTA) will create benefits for both Australia and Korea, including creating changes to imports patterns into Australia. The agreement, when in place, will allow 86% of Korea’s manufacturing, resources and energy exports to enter Australia duty free. When the agreement comes into force, Australia will phase out the remaining tariffs for the most import-sensitive manufacturing products progressively over eight years. Products covered by transitional arrangements include certain motor vehicles and parts, steel, chemicals, plastics and textiles, clothing and footwear products. KAFTA will eliminate 75% of tariffs on cars from Korea immediately upon the entry into force of the agreement. Tariffs for bigger cars will be reduced over a three year period, while tariffs on components will be phased out over three to five years, according to the Federal Minister for Trade and Investment, Andrew Robb. A bilateral safeguard mechanism will also be in place to address any sudden surge in imports over the transitional period.
“This agreement, fundamentally, backs those things that Australia does well and it backs those things that Korea does well,”Mr Robb said, adding, “the sustainable jobs and growth will come because we are enhancing, we’re improving, we’re innovating in all of those areas that we have typically been very strong.”