ABC AM Program – interview with Chris Uhlman

Subject: Korea-Australia Free Trade Agreement

Transcript, E&OE, proof only

17 February 2014

CHRIS UHLMANN:The Trade Minister Andrew Robb is lauding a new free trade agreement with Korea, Australia's third largest export market. Under the deal, Korea's agreed to slash tariffs on Australian exports of up to 555 per cent.

The Minister will release the text of an 1,800 page document today. He says it's a win for Australian agriculture and will deliver hundreds of millions of dollars in export earnings.

Andrew Robb, good morning.

ANDREW ROBB: Good morning, Chris.

CHRIS UHLMANN: Can you tell us, in words that make sense to Australian people, what a free trade agreement with Korea will mean?

ANDREW ROBB: What it will mean over the next 15 years is a growth in agricultural exports in excess of 70 per cent; manufacturing exports to Korea in excess of 25 per cent, up to 30 per cent; a growth in resources and energy exports between seven and 15 per cent.

So it means greater economic activity between our two countries; it means sustainable jobs; it means a growth in services - tremendous growth in services - and it's a really high quality, comprehensive, world class agreement.

CHRIS UHLMANN: There's always give and take in these agreements, of course; they all want something from us, which will mean that our market becomes more open, there'll be more competition from Korea - which does actually produce goods more cheaply than Australia. So should there be any cause for concern among manufacturers and suppliers here?

ANDREW ROBB: Well, in fact, manufacturers will increase by something in the order of 30 per cent over the next 15 years as a result of this agreement. For example: we currently sell about $120 million worth of gearboxes each year; we sell $50 million work of engines. Now, there's an eight per cent tariff on those two items that will be removed. So our component manufacturers immediately will be more competitive into the Korean market.

So there are all sorts of - especially at the high value end of manufacturing - wonderful opportunities that will emerge as a result of this free trade agreement.

CHRIS UHLMANN: And what about Australian farmers? Of course, a lot of the tariffs that you were talking about were on the sorts of goods that they want to sell.

ANDREW ROBB: Well, of course, beef - Korea is our second-biggest market, and there's a 40 per cent tariff on at the moment. And the US and the EU, two years ago - or more than that - struck an agreement with Korea, and they've got an advantage at the moment.

Now, we will eliminate that advantage with this free trade agreement, and it will mean significant opening up of the beef, sheep meats… but across the board with agriculture, there's a whole host of products. A 15 per cent tariff on wine will go immediately. So these sorts of opportunities are just critical, especially given the situation in agriculture.

There is an exploding market on our doorstep, but we have to be able to compete, and we have to have tariffs removed if we are going to access those markets, and I do feel that this is a major step in that direction.

CHRIS UHLMANN: That's the Trade Minister, Andrew Robb.

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