Nickolas Varvaris (Barton, Liberal Party) Share this | Hansard source

I rise to lend my strong support to the Customs Amendment (Korea-Australia Free Trade Agreement Implementation) Bill 2014, which amends the Customs Act to give force to the Korea-Australia Free Trade Agreement signed on 8 April of this year. This is an agreement which reflects and strengthens the close bilateral relationship between our two nations, significantly improves our access to the Korean export market and contributes to an overall movement towards liberalised trade between Australia and Asia. Australia and Korea have a close bilateral relationship, a relationship built on a foundation of mutual interest, shared values and a strong trading partnership.

In 2013 two-way trade between Korea and Australia was worth $32.1 billion. Korea is Asia's fourth largest economy, our third largest export market and our fourth largest overall trading partner. One reason why this free trade agreement is so significant is that it represents the cutting edge, the first major breakthrough, onto the frontier of preferential access agreements with Asian markets generally.

The Asian nations of China, Japan and South Korea together comprise a 50 per cent share of the Australian export market, with the Korean market on its own comprising a sizeable proportion of this market share. This indicates that our access to Asian markets is truly the key to building on our prosperity into this century. These markets are of such significance to Australian trading prosperity that our access to Asian markets must be maximised into this century and we must find ways to encourage investment in our uniquely Australian industries, especially our primary and agricultural industries.

As the Joint Standing Committee on Treaties found, the opening up of Asia's major markets is essential if Australian businesses are to successfully compete with the world in the years ahead. Indeed, before the conclusion of the Korea-Australia Free Trade Agreement on 8 April, significant free trade agreements with Korea had already been established between Korea and their other major trading partners, such as Chile and the USA.

If our nation intends to pave the way forward for an even stronger relationship with Korea, we must adapt to the way in which other nations are engaging with the Korean market. After all, the Korean market, according to the Australian dairy industry's submission of 2009, often depends 'more on price and availability than long-term customer-supplier relationships'. It said:

… it is important that we not only strive to achieve any advantage that we can find but also that we ensure that our competitors … do not have any advantage brought about by preferred access arrangements.

We must adapt to the global state of competition and preferential access if we are to remain competitive and expand our share of the Korean export market. Free trade agreements, which could also be termed 'preferential access agreements', have received a strong vote of confidence from trade and industry bodies, including in relation to the Korea-Australia Free Trade Agreement. Preferential access in the context of the Korea-Australia Free Trade Agreement will mean that 84 per cent of Australian exports to Korea will be tariff free immediately—a figure that will increase to 95.7 per cent after 10 years and settle at 99.8 per cent tariff free upon full implementation of the agreement.

Such agreements grow firmly out of the ethos of this coalition government. Whether it be from the Liberal Party's commitment to liberalisation of markets or the Nationals' commitment to a strong export market, free trade agreements have always had a strong vote of confidence from this side of the House, in the coalition. As a member of the coalition, I firmly believe in the power of trade as the key to prosperity. When nations open their doors to investment, to import and export, their economies flourish and jobs are created. Australia has gained a sense of true pride in being such a quality exporter to Asian markets. Indeed, in Korea, our pork and beef products are known to be among the cleanest and highest quality imports in the nation.

Free trade agreements achieve three major objectives: Firstly, they encourage the liberalisation of markets—a key commitment of this government, which ratifies the Prime Minister's initial declaration that Australia is 'open for business'. Secondly, they open up market access for Australian exporters and Australian consumers. Thirdly, they strengthen the already close bilateral relationship between two major trading partners.

Failing to support action to remain competitive would mean that there is no viable alternative plan for the maintenance of our national prosperity. If our major competitors have concluded agreements of this nature, our market access to Korean markets will weaken. I am proud and grateful to be part of a pro-trade government that has entered into this important agreement wholeheartedly, where an alternative government would not have done the same, forfeiting growth, jobs and prosperity for the decades ahead.

The fact that this agreement has been successfully concluded within the first term of an Abbott coalition government, where other attempts have fallen short, should instil confidence in the people of this nation that, when the coalition is at the reins, the creation of prosperity is an absolute priority. If the Australian government of today had said no to this free trade agreement, Australian exporters would still be facing prohibitive barriers of, on average, a tariff of 53.6 per cent on agricultural imports and prohibitive tariffs on some products of up to 550 per cent. Australian exporters would face a reduced level of competitiveness, forfeiting an expanded market share and a strengthening of the significant Korean investment.

The coalition wants to be a friend to Australian industry. The coalition wants to stand by the comments of such an authority as Ian Murray AM, Executive Chairman of the Export Council of Australia, who says that the Korea-Australia Free Trade Agreement is particularly important to those exporters who have not been competing on a level playing field in Korea. He says:

It is a huge breakthrough—the value of which should not be underestimated.

Mr Murray's statement is absolutely correct. The main export markets which stand to gain in a big way from this free trade agreement are raw sugar, beef, wheat, malt, barley, dairy, wine, seafood, horticulture, ores, concentrates, petroleum, coal, chemical elements, pharmaceuticals and automotive parts.

It is legitimately exciting to consider the wide range of benefits that the conclusion of this agreement will bring about for Australian industries, and I will be happy to see these benefits culminate in a return to the farm gate and a boost in prosperity for regional Australia. I must say that the Minister for Agriculture has been steadfast on this point in alliance with the Minister for Trade and Investment.

It was heartening to review the submissions to the feasibility study on the Korea-Australia Free Trade Agreement and to witness such a variety of quarters urging the Australian government to proceed with this significant agreement. Key submissions came from the Western Australian Department of Agriculture and Food, the Ricegrowers' Association of Australia, the Generic Medicines Industry Association, Australian Pork Limited and the Australian dairy industry. The Export Council of Australia and the Australia Korea Business Council also made known their strong support for the proposal.

I would like to take a few moments now to read some of the clearest messages received in these submissions. The Western Australian Department of Agriculture and Food called the Korea-Australia Free Trade Agreement 'a big opportunity to help strengthen the businesses of Western Australian farmers and agrifood businesses'. They warned that failure to approve the agreement 'would be a substantial missed opportunity' in the light of other potential Korean and Australian free trade partners.

The Ricegrowers' Association of Australia supported the Korea-Australia Free Trade Agreement with the view:

… South Korea is an important market for the Australian rice industry …

The Generic Medicines Industry Association indicated:

… exports of medicines have shown the strongest growth of any major Australian manufacturing export to the Republic of Korea.

Australian Pork Limited gave some of the most enthusiastic support for the agreement, looking to the future in its statement:

… with Australia's high herd health status Korea can become an even larger export market.

It said:

… Australia cannot realise this market potential without an FTA.

Similarly, the Australian dairy industry used strong language in its submission, urging the Australian government to 'commence negotiations as soon as possible to achieve a substantial liberalisation of dairy trade between the two countries' and pointing out that the industry is 'keen to capitalise' on the growth of 'one of the world's most valuable and fastest growing dairy markets'.

Primary industries make up the backbone by which the whole of Australia is supported. Measures that free up export markets and benefit these pivotal industries will ultimately benefit us all. But the benefits that we will see come back to the farm gate and to the Australian industry as a whole are just one element of this agreement. The preferential access which Korean imports will be given in Australia represent a huge gain for all kinds of Australian consumers. As the member for Barton, I am keen to see my constituents benefit from a range of Korean goods becoming more affordable via preferential access—goods which will include refined petroleum; telecom equipment and associated parts; pumps; heating and cooling equipment; and motor vehicles.

Ultimately, these bills are about our longstanding support as government for the liberalisation of trade. These bills, and the free trade agreements that our government support as a whole, stem from our belief in breaking down barriers between Australia and our partners, our belief in being competitive on the international stage and our belief in job creation and staying ahead when progress is made by our competitors. These bills stem from our belief in strengthening the bilateral ties between our nation and our partners, especially our Asian partners, our belief in the openness of trade and exchange and our commitment to winning the benefits for the average Australian consumer. They demonstrate our commitment to a fair go for regional Australia and delivering benefits to the farm gate. For all these reasons, I am confident in commending these bills to the House.

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