ABC Rural – Interview with Anna Vidot
Subject: Korea-Australia Free Trade Agreement.
Transcript, E&OE, proof only
5 December 2013
WENDY COLLIS: The Trade Minister, Andrew Robb, spoke to ABC rural from Bali shortly after making the agreement.
ANDREW ROBB: This is the best trading deal, I think, that we've done, certainly since the United States free trade agreement over ten years ago, and in many respects it's better for us on agriculture and some other products. It's a wonderful world class deal it's a quality free trade agreement with our fourth largest trading partner.
ANNA VIDOT: How much is this going to be worth to Australian exporters – agricultural exporters in particular?
ANDREW ROBB: The work we've done suggests that agricultural exports between now and 2030 will be 73 per cent higher as a result of this deal. Exports of manufacturing will be 53 per cent higher as a result of this deal, and exports overall, from Australia to Korea, will be 25 per cent higher. Now, bear in mind that we currently export around $20 billion a year, that is a massive increase.
ANNA VIDOT: The Australian beef industry was arguably the most desperate to get a deal done with South Korea, Australia's third largest beef export market. Our major competitor there is the United States, which already has an FTA in place phasing out their beef tariffs, which in turn made Australian beef increasingly uncompetitive. Now, tariffs on Australian beef will also be phased out over 15 years.
ANDREW ROBB: We've now locked in the situation with the United States, there's a five per cent differential, and it won't get any larger than that and we will reduce each year by 2.7 per cent over 15 years for the beef industry. The beef industry was saying if we could pull off this 15 year rather than 18 or 20, it would keep them in a strong position. Of course, it's a huge market for us for beef, but of course with this deal we've got tariffs of up to 300 per cent being eliminated on nearly all key agricultural exports, and significant reductions in – well, total elimination in resources and energy and manufactured goods.
ANNA VIDOT: The deal includes some interesting provisions on foreign investment too. Right now, the Foreign Investment Review Board scrutinises all foreign purchases over $240 million, that will be increased to $1 billion under this agreement, except for agricultural land and agri-business where the threshold will be significantly lowered, and that means more scrutiny, not less.
ANDREW ROBB: There's a $15 million threshold on agricultural land at which stage the Foreign Investment Review Board would consider the relative merits of an investment. On agri-business, it's a $53 million threshold.
ANNA VIDOT: Why make the distinction between agricultural land, water and agri-business, and all other investment?
ANDREW ROBB: Well, that has been the clear policy that we came to the election with. There is a sensitivity about ownership of agricultural resources. In the century of water and food security, the community is really demanding not that we stop investment in these areas, but when investments are made that they are considered, and we make sure that it's in the national interest.
WENDY COLLIS: That's the Trade Minister, Andrew Robb, ending Anna Vidot's report.
- Trade Minister's Office: (02) 6277 7420
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