Australia and South Korea signed a free trade agreement (FTA) on April 8th, 2014, which officially came into effect on December 12th, 2014. The agreement has allowed both countries to enhance their trade relationship by removing barriers on goods and services trading.
The FTA is significant for both Australia and South Korea, as it is the first Korean FTA with a major agricultural exporting country. As a result, Australian exports of beef, wheat, and dairy products are expected to increase significantly under the agreement. In return, South Korean exports of cars, steel, and electronics are expected to increase in Australia.
The agreement has provided some significant benefits to Australian businesses, such as the reduction or elimination of tariffs on Australian exports to South Korea. 84% of Australian goods exported to South Korea now enter the country duty-free, and the remaining tariffs are expected to be completely eliminated by 2021.
For South Korea, the FTA provides better access to the Australian market, which is considered a gateway to Asia. The FTA has helped South Korea expand its automotive, steel, and electronics industries, which are all key sectors for South Korea`s economy.
The FTA has also opened up opportunities for Australian small and medium-sized enterprises (SMEs), which previously faced significant barriers to entry in South Korea. Through the FTA, Australian SMEs have access to the Korean market, with a reduction in tariffs.
In addition to the benefits for businesses, the FTA has also provided benefits for consumers. The agreement has made it easier and more affordable for Australians to access South Korean goods and services, including K-pop, Korean dramas, and Korean beauty products.
The FTA has also provided a significant boost to the Australian economy. The agreement is expected to increase Australia`s GDP by AUD 650 million and create new job opportunities in a range of industries.
In conclusion, the Australia-South Korea Free Trade Agreement has provided significant benefits to both countries. The deal has strengthened the economic relationship between Australia and South Korea and has facilitated increased trade and investment. The FTA provides a framework for continued growth and cooperation between the two countries, and is a positive step towards closer ties in the future.