Wyatt Roy (Longman, Liberal Party) Share this | Hansard source

On behalf of the Joint Standing Committee on Treaties I present the committee's report 142, incorporating dissenting reports, entitled Treaty tabled on 13 May 2014.

Report made a parliamentary paper in accordance with standing order 39(e).

by leave—Today I present the Joint Standing Committee on Treaties report 142, containing the committee's views on the Free Trade Agreement between the Government of Australia and the Government of the Republic of Korea. The Korea-Australia Free Trade Agreement, or KAFTA, was tabled in parliament on Tuesday 13 May 2014.

Free trade agreements are becoming increasingly popular as a means of encouraging trade liberalisation, opening up market access and strengthening bilateral relationships. This is the eighth free trade agreement that Australia has signed.

Korea is one of Australia's most important trading partners: our third-largest export market, our fourth-largest trading partner and a growing investment partner. Currently, Australia faces various tariff and non-tariff barriers and restrictions in Korea. Korea's average tariff on imports is 16.8 per cent, with an average tariff on agricultural goods of 53.6 per cent and tariff peaks of over 500 per cent.

KAFTA will eliminate these very high tariffs on a wide range of Australian goods exports, including beef, wheat, sugar, dairy, wine, horticulture and seafood. It will also create new market openings in key areas of commercial interest to Australian services providers, including legal, accounting, financial, education and other professional services.

KAFTA is expected to be worth $5 billion in additional income to Australia between 2015 and 2030. It is expected to provide an annual boost to the Australian economy of approximately $650 million after 15 years of operation. In its first year of operation, KAFTA is expected to create 1,700 jobs. Eighty-four per cent of Australia's current exports, by value, will enter Korea duty free. Agricultural exports are expected to increase by 73 per cent and manufacturing by 53 per cent by 2030 as a result of the agreement.

The committee found that a range of benefits are likely to flow from the implementation of KAFTA for Australian businesses, industry and exporters. Apart from the direct value of tariff reductions, increased competitive advantage and potential future opportunities were identified as tangible positive results. Witnesses emphasised the importance of the agreement in protecting our competitive edge in the Korean market as Korea signs free trade agreements with our major competitors, including the United States, European Union, Chile and ASEAN countries.

We identified and examined a number of issues that are causing concern amongst the wider community. In particular, the perceived dangers associated with the inclusion of an investor-state dispute settlement mechanism in the agreement and possible changes to intellectual property rights. More generally, some dissatisfaction with the treaty-making process in Australia was drawn to our attention. However we recognise the constitutional constraints on the process in Australia and we highlight the improvements that have been made over the last two decades.

Overall, the committee is satisfied that KAFTA will provide substantial economic benefit, not only to Australian business and industry, but also to the broader community.

I might take this opportunity to thank the hard work of the negotiating team, predominantly in DFAT, but across the public service. I also thank my fellow committee members, who undertook a very large body of work in formulating this report on what is a very significant agreement for our country. And I also thank the committee secretariat team, some of whom are here in the chamber today, who joined us on that journey and who put together what is, again, an enormous body of work on a very important agreement.

On behalf of the committee, I commend the report to the House.

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