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South Korea, Australia finalise FTA arrangements

Staff writer |
South Korea and Australia have undergone plenty of obstacles before the conclusion of negotiations for a free trade agreement (FTA). Australian Prime Minister Tony Abbott also welcomed Korea's interest in the Trans-Pacific Partnership.

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In an exclusive phone interview with the Maeil Business Newspaper, Australian Prime Minister Tony Abbott said, "Australia considers the inclusion of ISDS mechanisms in trade agreements on a case-by-case basis. Meanwhile, Australia agreed to exempt Korea's most sensitive products, such as rice and milk powder, to protect Korea's domestic agriculture sector."

"On beef and dairy, we agreed to stage tariff reductions over long lead times - 15 and 20 years respectively," Mr. Abbott said. He added that Australia has long protected our automobile and clothing sectors. However, he believed that in the long run such protection hurts the economy and hurts consumers.

The FTA will also help strengthen Korea's agriculture sector by supporting the sharing of ideas and technology with Korean farmers to improve efficiency and increase exports.

Korean-made cars have a reputation for quality and competitive pricing and are among the most popular in Australia's one-million-a-year car market. Abbott said, "the Hyundai i30, for example, was the fourth-highest selling car in Australia in 2013. Australia is the Korean automotive industry's third-largest market."

Korean automakers will benefit considerably from the elimination of Australian tariffs under this FTA.

Abbott went onto say, "on investment, the agreement will improve opportunities and protection for Australian investors and investments in Korea and will help attract direct investment from Korea into Australia. Korea will receive higher Foreign Investment Review Board screening thresholds consistent with thresholds provided to the US and New Zealand."

Abbott welcomed Korea's interest in the Trans-Pacific Partnership, "Korea is well-placed to join and could make a valuable contribution. I note Korea has commenced its preliminary consultations with each of the TPP parties, including Australia, as part of its process for determining whether to formally seek membership."

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