Korean FTAs in Effect
The Korea-Australia Free Trade Agreement (FTA) went into effect on
December 12, 2014
Australia, which is the 11th country to reach an FTA with Korea, is the world’s 12th largest economy and has a high purchasing power. Korea is also one of the largest importers of Australian minerals. The bilateral FTA will provide a stable supply of resources by increasing cooperation and investment stability.
Significance of the Agreement
A promising export market opening for our major exports
All tariffs on goods in trade with Australia will be abolished in five years after the FTA went into effect, and it is expected our major exports, particularly those on rising demand including cars, heat exchangers, pumps, TV, metal products and machinery will expand their market shares in the country.
Complementary trade structure
The two contracting countries have a complementary trade structure, where we mainly export manufactured goods including automobiles and parts, petroleum products and steel products while importing raw materials and energy resources including steel, coal and crude oil from Australia. The trade between the two is expected to expand further owing to the FTA.
Importance of the Australian Market
- Australia is the world’s 12th largest economy (as of 2012, World Bank) and has a domestic market of high purchasing power driven by its per capita income of USD 67,556, which is the 6th highest in the world. It has a strong potential to expand its trade with Korea.
- Australia is an ideal FTA partner with a complementary trade structure, where the country exports raw materials and energy resources to us, whereas we mainly export manufactured goods including automobiles and petroleum products.