KOREA NUMBER TWO EXPORT DESTINATION IN 1994

Preliminary data from the Australian Bureau of Statistics (ABS) indicates that Korea has overtaken the United States to become Australia's number two export trading partner, the Minister for Trade, Senator Bob McMullan, said today.

Japan remains Australia's biggest customer for export products.

Senator McMullan said the strong growth in Australia's exports to Korea, and to Asia more generally, is drawing Australian exports away from the United States and, as a result, reducing our exports to that market.

"Two major examples of this trade diversion are Australian exports of petroleum and crude oil, and of alumina and aluminium products," Senator McMullan said.

"However, while Australian trade to the United States is lower as a result of this trade diversion, our exports to the world in total are higher.

"We are saving the cost of shipping the product to the United States, and the booming Asian demand for these products is raising commodity prices as well, thus benefiting producers both in a growth and net return sense."

Exports to Korea in 1994 were worth $4732 million - up by 8.6 per cent according to the ABS preliminary data. Exports to the United States were worth $4623 million - down by 8.8 per cent.

Korea has long been a very good market for Australian commodities. It is the world's second biggest buyer of Australian coal, iron ore and wheat. Other Australian commodities also performing well in Korea include gold, aluminium, sugar, wool, beef and cotton.

Importantly, Korea is now also a very strong market for Australian manufactures - a fact often not recognised in Australia.

Manufactures now constitute 25 per cent of Australian exports to this market.

Manufactured products doing very well include iron and steel, car engines, computers, photographic film, chemicals and processed foodstuffs.

Senator McMullan said there are further opportunities to expand into the Korean market for companies prepared to establish themselves there.

"Korea's increasingly affluent middle class is reaching out to the world for access to the best products the world has to offer, and Australia is in a strong position to supply the market, Senator McMullan said.

"While the improvement in our trade relationship with Korea is great news, we must not get complacent about our performance elsewhere in the world, particularly in our traditional markets.

"This result adds weight to the review of our trade relationship with the United States which I announced last week."

Further information: John Flannery, (06) 277 7420, 018 482 887