Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Hansard source

by leave—It is with great pleasure that I table the Korea-Australia Free Trade Agreement (KAFTA) and accompanying national interest analysis for parliament's consideration. I signed the agreement with my Korean counterpart in Seoul on 8 April, during the Prime Minister's historic and very successful visit to North Asia.

As with all proposed treaties, the parliament's Joint Standing Committee on Treaties will now review KAFTA and, in due course, provide its report. A parallel inquiry is being conducted by the Senate Foreign Affairs, Defence and Trade References Committee. Importantly, the tabling today of KAFTA will also give the public the opportunity to scrutinise in detail the provisions of the treaty.

On a day when we will turn our attention to addressing the nation's budget, it is timely to point out some of the most important features of KAFTA and the contribution it will make to Australia's economic future. The signing of KAFTA is a significant milestone for the government's economic diplomacy agenda. KAFTA is a world-class, comprehensive agreement that substantially liberalises our existing and growing trade with Korea: our third largest export market, our fourth largest trading partner, and an economy with an above average growth outlook. It is a liberalising agreement with one of Australia's most important trading partners. Over an implementation period of 15 years, from 2015 to 2030, KAFTA is expected to create 15,000 jobs and add $5 billion to our economy.

KAFTA is the first of a series of bilateral trade agreements we are committed to concluding with major trading partners. These agreements, when they enter into force, will translate to more jobs and higher economic growth for Australia, and demonstrate definitively that Australia is open for business. To this end we concluded negotiations with Japan during the Prime Minister's visit to Japan on 7 April and have re-energised our negotiations with China. These agreements will add a new dimension to our bilateral relationship with each country, part of a deepening engagement with our North Asian partners.

KAFTA gives Australian exporters significantly improved market access in goods and services. It eliminates very high tariffs on a wide range of Australian goods exports, including beef, wheat, sugar, dairy, wine, horticulture and seafood, and it creates new market openings for services. KAFTA will substantially improve investment protections and further integrate Korea with Australia's open and stable economy.

Importantly, KAFTA also protects our competitive position in the Korean market. Today, Korea is giving preferential access to our major competitors, including the United States, European Union, Chile and ASEAN countries. But immediately on KAFTA's entry into force, Korea's tariffs will drop to zero for 84 per cent of its imports (by value) from Australia, and most other tariffs will be phased out quickly. Ninety nine point eight per cent of Australian goods exports will enter Korea duty free on full implementation of the agreement.

For agriculture, Korea will eliminate tariffs immediately on entry into force for raw sugar, wheat, wine and some horticulture. Tariffs on most other agricultural products will be eliminated within short time frames thereafter. Importantly, Korea will eliminate its 40 per cent tariff on beef products progressively over 15 years, and will help to level the playing field for Australian beef exporters, particularly relative to the United States. Korea will also eliminate all tariffs on manufacturing, energy and resources within 10 years. This will particularly benefit our resources, pharmaceutical, energy and automotive parts exporters.

As part of our own commitments, Australia will remove its remaining tariffs on Korean goods on entry into force or over several years. Removing our remaining tariffs on Korean goods will benefit Australian consumers and industries which rely on imported Korean products. Tariffs relevant to local sectors which compete against Korean products, including some vehicles, automotive parts, steel and textiles, footwear and clothing, will be phased out in staging periods to allow industry to adjust.

KAFTA will provide Australian services exporters with outcomes equivalent to the best treatment Korea has agreed with any trading partner, on par with its agreements with the United States and Europe. This includes new market access for suppliers of legal, accounting and telecommunications services, and guaranteed open access across a broad range of other services, including financial and education services.

KAFTA improves opportunities and protections for Australian investors and investments in Korea. It will also attract more direct investment from Korea into Australia and promote investor confidence and certainty in both countries.

KAFTA includes an investor-state dispute settlement, or ISDS, mechanism, consistent with the government's policy of considering ISDS on a case-by-case basis. The government has ensured inclusion of appropriate carve-outs and safeguards in important areas such as public health and environmental measures.

KAFTA creates opportunities for closer collaboration between Australian and Korean businesses, including in professional services and agricultural and resources research and training. An audiovisual co-production agreement will deliver new commercial opportunities for the Australian film and television industry.

With one in five Australian jobs linked to trade, this agreement will provide an important boost to Australia's economy. Economic modelling estimates goods liberalisation alone to be worth nearly $5 billion in additional GDP to Australia between 2015 and 2030, resulting in an annual boost to the economy of around $650 million after 15 years of operation. Our agriculture exports are modelled to increase by 73 per cent and manufacturing exports by 53 per cent by 2030 as a result of this free trade agreement.

Ultimately, Australia's objective in pursuing free trade agreements is to increase the prosperity of Australians. We achieve this by negotiating liberalising agreements that eliminate or substantially reduce barriers to trade and help to minimise red tape, to the benefit of both parties. KAFTA meets this objective.

The economic benefits of this free trade agreement to our businesses and consumers—and to the Australian economy more broadly—will start to flow once KAFTA enters into force. We aim to ensure this important agreement can enter into force by the end of 2014 to allow Australians to reap the benefits from this agreement as early as possible.

Implementation of KAFTA will require a number of legislative amendments and I urge members and senators to give favourable consideration to these amendments when they are introduced. This is an agreement that took a long time to negotiate, and I commend the achievement of officials from various agencies led by the Department of Foreign Affairs and Trade. I also acknowledge the contribution of colleagues opposite and the former trade minister, Craig Emerson.

I commend this agreement to parliament, and hereby table the Korea-Australia Free Trade Agreement with its national interest analysis.

I ask leave of the House to move a motion to enable the member for Sydney to speak for 8½ minutes.

Leave granted.

I move:

That so much of the standing orders be suspended as would prevent the member for Sydney speaking for a period not exceeding 8½ minutes.

Question agreed to.

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