Canada and South Korea are still talking free trade, but Australia has sealed a deal.
Australia and South Korea have signed a free trade agreement (FTA) that will eliminate tariffs of up to 300 per cent on Australia’s major exports, notably agricultural products and resources, Australian Prime Minister Tony Abbott said Thursday.
Earlier this week the Canadian Cattlemen’s Association (CCA) reported free trade talks between Canada and South Korea, stuck on the back burner for months at a time since 2005, had resumed with what appears to be renewed interest in a deal.
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The Yonhap news agency, quoting the South Korean government, reported Wednesday that trade ministers of South Korea and Canada had agreed to work toward early conclusion of a bilateral free trade agreement. The two met at World Trade Organization talks underway this week in Bali, Indonesia.
“Minister Yoon Sang-jick and Canadian Minister of International Trade Ed Fast noted that there had been significant progress in negotiations for the Korea-Canada FTA,” Korea’s ministry of trade, industry and energy said.
The U.S. and South Korea signed a free trade agreement last year, and Australia’s beef farmers had become increasingly concerned about losing market share to the U.S. It offered a 5.3 per cent lower tariff than Australian beef and veal. The tariff on U.S. beef is to be eliminated over 15 years.
“The deal is significant for beef,” said Matt Linnegar, chief executive officer of the Australian National Farmers Federation told Reuters from Indonesia.
“The differential between Australia and the U.S. stands at about five per cent… but it would have been eight per cent next year without the deal so we would have been at an increasing disadvantage.”
The tariff on Australian beef will also be removed in 15 years. Until then Australian beef will face a higher tariff than shipments from the United States, but farmers said they will remain competitive.
South Korea is Australia’s third-largest export market and fourth-largest trading partner. It is the third-largest buyer of Australian beef and veal, figures from the Australian Department of Agriculture show, and it is expected to import 142,000 tonnes during the 2013-14 season, a rise of three per cent from the previous season.
The CCA noted Korea has recently expressed interest in joining the Trans-Pacific Partnership (TPP) negotiations toward an Asia-Pacific free trade zone. To join the TPP, Korea will have to be accepted by all of the existing partners — a list which includes both Canada and Australia.
“We believe that Korea may be highly motivated to conclude bilateral agreements with Canada, Australia and New Zealand in order to pave their way into the TPP,” the CCA said. — Reuters/Staff
Related story:
Canada/Korea trade talks back on track: CCA, Dec. 3, 2013
