Australia-Korea FTA Study

The Minister for Trade, Warren Truss, today announced that Australia and the Republic of Korea have agreed to conduct a joint study on a possible free trade agreement.

The study will be conducted by private research institutions in both countries. Government officials will then review its findings and make recommendations to the governments.

An Australia-Korea FTA potentially offers significant benefits to both countries. Our already strong commercial relationship is founded on our complementary economies.

Australian exports of resources and energy already make a significant contribution to Korea’s economy and its export growth. Korea is also our third most valuable market for Australian beef, with exports worth $662 million in 2005‑06. Korea is a significant market for Australian services exports, particularly education (with 26,000 students studying in Australia in 2005) and tourism (with nearly 250,000 Koreans visiting Australia in 2005-06).

Our strong export performance saw total bilateral trade reach a record $20 billion in 2005‑06. Australian investment in Korea has also been growing steadily.

A comprehensive FTA would further strengthen and deepen the bilateral commercial relationship. An FTA, by lowering input costs through reduced tariffs, would multiply the contribution of Australian exports to Korea’s economic and trade performance. Importantly, a comprehensive FTA would also allow Australian service providers to play an even greater role in assisting Korea achieve its ambition of becoming a North Asian services hub.

The study will provide a useful basis for both governments to consider moving towards the commencement of negotiations. Australian industry will be consulted closely to ensure its interests are represented in the Government’s consideration of the study outcomes.

Tenders for the Australian partner in the joint study will be called early next year, and I anticipate its report will be provided to both governments towards the end of 2007. I look forward with interest to its conclusions and then the next steps to commencing negotiations.

Media Inquiries: Minister Truss' office 02 6277 7420 - Departmental Media Liaison 02 6261 1555