Former Minister for Trade
Australian Commonwealth Coat of Arms

5 March 2009

Australia and Korea launch FTA negotiations

The Minister for Trade, Simon Crean, welcomed the announcement today by the Prime Minister and the President of the Republic of Korea, Lee Myung-bak, that Australia and Korea had agreed to launch bilateral free trade agreement (FTA) negotiations. 

“The successful conclusion of an FTA with Korea, will ensure that Australia can open up new job opportunities and further develop our strengthening trade relationship with the region - that is vital to our future economic prosperity," Mr Crean said.

Mr Crean said that Korea had negotiated or was negotiating FTAs with the United States, the European Union, Canada, ASEAN, New Zealand, Chile and others. 

“Some of the concessions gained by other countries are a threat to Australian exporters to Korea,” he said.  “So it’s crucial for Australia to push ahead quickly with negotiations”.

Mr Crean added that the FTA could also strengthen services and investment links between the two countries.  He pointed out that Korea was already Australia’s third largest source of overseas students and Australian firms were also prominent investors in financial services in Korea. 

“Services and investment will be important in the negotiations,” he said.  “We need to diversify this important economic relationship.”

“Agreement to begin FTA negotiations has a global significance,” said Mr Crean.  “Australia and Korea are important trading nations.  By demonstrating a shared commitment to continue trade and investment liberalisation, despite the global financial crisis, we are sending a strong signal to the rest of the world that now is not the time to retreat into protectionism.  We are saying that trade is part of the answer, it is not the problem.”

“Negotiations will be tough in areas of sensitivity for each side,” warned Mr Crean.  “But I’m confident that we will produce a comprehensive FTA that will support growth, jobs and livelihoods in Australia.  Today I met my Korean counterpart - Trade Minister Kim Jong-Hoon - and we agreed to meet again in May to formally start the FTA negotiations.

Trade between the two countries in 2007-08 reached $22.8 billion, with exports worth $16.1 billion in that period.

A joint non-Government report found that an Australia-Korea FTA could boost Australia’s GDP by up to US$22.7 billion over 14 years (A$30 billion using the 2005 exchange rate).

Resource commodities (energy and mineral products), plus simply-transformed metals such as aluminium and copper, account for around two-thirds of Australian merchandise exports to Korea.  The largest export items in 2007-08 were crude petroleum ($2.4bn), coal ($2.4bn), iron ore ($2.1bn), beef ($763m) and aluminium ($710m).  Tourism and education exports have also increased strongly in recent years.

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