FTA Beefs Up Korea-Australia Relationship

AUSTRALIA - Today’s announcement by Prime Minister Kevin Rudd and the President of the Republic of Korea H.E. Lee Myung-bak that negotiations on a Free Trade Agreement (FTA) are to begin marks an exciting new phase in the already strong relationship between the two countries, according to Meat & Livestock Australia (MLA).

5 March 2009

2 minute read

Oceania

Given Korea's importance as an export destination, the Australian red meat industry strongly supports the launch of negotiations aimed at concluding an inclusive FTA according to MLA Managing Director, David Palmer.

“A comprehensive FTA that further facilitates trade to one of our most important beef customers, presents a unique opportunity,” Mr Palmer said.

“Securing a stable trade platform will be of direct benefit to Korean consumers who are demanding reliable, safe, quality product which our industry supplies.

“Our relationship with the Korean industry is already strong, and closer bilateral cooperation will further strengthen this relationship.”

During 2008, Australia exported 127,206 tonnes of chilled / frozen beef, 1987 tonnes of lamb, 1181 tonnes of mutton, 241 tonnes of goat meat and 19,423 tonnes of offal to Korea.

These export volumes reaffirmed Korea as Australia’s third largest beef export market - capturing 13 percent of the volume of Australia’s global beef exports. Together, red meat products exported to Korea generated over A$750 million in returns to the industry.

“MLA will continue to liaise closely with industry peak councils and the Australian Government now that FTA negotiations are to commence,” Mr Palmer said.

All beef imported into Korea, including that from Australia, currently faces a 40 percent tariff.

The issue of an FTA between Australia and Korea has gained significant importance since the formalisation last year of an FTA between Korea and the US.

Although the Korea/US FTA was signed last April, it is yet to be ratified by either government.

Under the proposed Korea/US FTA, the tariff on US beef into Korea will be reduced from 40 percent to zero over 15 years. Prior to the discovery of BSE in the US herd four years ago, the US was the largest exporter of beef to Korea, a position since taken by Australia.

“An FTA with Korea is an imperative for the Australian beef industry especially in light of the FTA Korea negotiated with the US, which will obviously make Australian beef comparatively less price competitive when it is implemented,” Mr Palmer said.