Money News, 2GB Sydney, interview with Ross Greenwood

Subjects: release of the full text of the Korea-Australia FTA

Transcript, E&OE, proof only

17 February 2014

ROSS GREENWOOD: The full trade agreement with Korea has been today publicly released by the Minister for Trade and Investment, Andrew Robb. As you're aware. Korea is our third biggest export market, the fourth largest trading partner. Now with all of these things, free trade agreements, obviously there's give and take. So for Australian farmers say for example, beef tariffs would disappear over a period of time. In fact over quite an extended period of time, almost 15 years. But there'd be things such as parts of fruit or dairy - some of those would be eliminated over the next couple of decades. Then for products coming in to Australia there would be tariffs on say motor vehicles that will also disappear.

And some car parts on top of that. Let's try and work out exactly how this sits now. Andrew Robb is our Trade Minister, he's been negotiating this and has told us previously that this would be the blueprint for deals if done with both Japan and also with China. Many thanks for your time, Andrew.

ANDREW ROBB: Thank you, Ross. Nice to speak to you.

ROSS GREENWOOD: Look, here's the thing. I mean the free trade agreement - one thing that some people will query is some of those tariffs that will come off on goods coming in to Australia from South Korea, are they disappearing as slowly shall I say as some of the tariffs that are disappearing on some of our agricultural products?

ANDREW ROBB: Well, no they're not. No, ours are disappearing over three to five years, mostly. But some of their tariffs for instance - we've got tariffs of around five per cent on most goods, if at all. But I mean they've got potatoes at 300 per cent. Now on the introduction of this agreement that will go to zero overnight.

ROSS GREENWOOD: So potatoes, say for example. Aussie potatoes will be in Korea. What other things because I know say for example, the beef is currently 40 per cent but it goes over 15 years as I said before. Say for example, I don't know, what would be another big one, would be blue fin tuna is 10 per cent. Now that obviously goes more quickly, say three years.

ANDREW ROBB: Yes.

ROSS GREENWOOD: So there are opportunities for some farmers perhaps in that whole aquaculture area that is going to be more immediate than what it will be say for Australia's beef farmers.

ANDREW ROBB: Well, most of the horticulture for instance, like cherries, will go from 24 per cent to nothing immediately. Carrots and turnips from 30 per cent to nothing over five years. Ground nuts from 64 per cent over 10 years; tomatoes over seven years from 45 per cent. But there's almonds from eight per cent to nothing immediately. Dry grapes from 21 to nothing immediately. Wine, very importantly, from 15 to nothing, immediately. So it varies but the point is that all of them in fact by the end of this 99.8 per cent of all of our exports into Korea, 99.8 will be zero at the end of this exercise.

So, for an Asian country which typically is characterised by very, very high levels; some of them, malt and barley up to 500 per cent. Now that will come down to nothing in 15 years. So it's going to - it's a linear reduction. So it's got a lot each year. Now this is a huge agreement. This is what you call a really high quality agreement because in the end, there'll be zero tariffs on all of our exports.

ROSS GREENWOOD: Rice, I can understand, would have been sensitive, as it would be with both Japan and also Korea and also China, when you do those deals, but Korea - also rice would be a sensitive industry for their farming industry. Why was honey excluded from the deal?

ANDREW ROBB: Well, again, they had a small list of what they said were very sensitive issues and honey was on that list. Walnuts, for instance, were on that list. I hope in other agreements, we won't have that problem with walnuts. Rice was the main one, because for many of those people I think negotiating this agreement, their parents would have been - it's only one generation since that was their livelihood. Everyone existed on rice that was grown locally. It's more a cultural thing than anything else and I think, you give it another 20 years and it might be quite different.

So we had to be sensitive to some of those issues, but, as I said, they're only 0.2 or 1 per cent; 99.8 per cent of all of the things we export will ultimately be zero levels of tariff, which means we've got enormous opportunity. There are many things now within the next two to three years - but even on the beef, they're our second biggest market now. Second biggest.

And with that reduction each year over 15 years, from 40 down to nothing, it means that we keep up with the Americans and the Europeans who struck an agreement with Korea two years ago. If we hadn't completed this deal in the last couple of months, we would have been put at a very severe disadvantage and lost a lot of market share to the United States and to Europe.

ROSS GREENWOOD: Just a final one for you. Will manufacturing jobs be lost as a result of this deal with Korea?

ANDREW ROBB: No. Over the next - there'll be some pressure on, again, on autos, but this is a deal which looks to back Korea's strengths but also to back Australia's strengths.

And the modelling that's been done suggests that because of this deal, agricultural exports will increase by over 70 per cent over the next 15 years, but importantly, manufacturing exports - especially high-value manufacturing - will increase by 50 per cent over the next 15 years, so it is part of our plan for sustainable growth and sustainable jobs, increasing jobs, in the years ahead.

ROSS GREENWOOD: Andrew Robb, our Trade Minister, negotiating that deal. When do you reckon it will actually be signed, Andrew?

ANDREW ROBB: Hopefully in April. The Prime Minister is going to Seoul in April, and hopefully be ready to sign and it will take effect before the end of the year once this… certain legislation needs to be passed in both countries, and then all of those benefits will accrue to our producers here locally.

ROSS GREENWOOD: Andrew Robb, appreciate your time.

ANDREW ROBB: Thanks, Ross.

- Ends -

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