Korea FTA unlocks opportunities for small business16 December 2014
12 December 2014
Minister for Trade and Investment
Small and medium businesses in Australia are being encouraged to explore exciting new export opportunities made possible by the Korea-Australia Free Trade Agreement (KAFTA), which entered into force today.
Minister for Trade and Investment Andrew Robb together with Minister for Small Business Bruce Billson, explained the comprehensive Agreement with our third-largest export market, provides benefits to a wide range of small and medium business enterprises (SMEs), from service providers to manufacturers and producers.
Mr Robb said from today, 84 per cent of Australia’s merchandise exports to Korea, by value, enter duty free, rising to 99.8 per cent when the Agreement is fully implemented.
“The tariff outcomes for small to medium agricultural enterprises for example are substantial; tariff cuts on commodities including beef, dairy, sugar, cherries, oranges, wheat and wine will benefit existing export businesses, and hopefully encourage more producers and manufacturers to seek-out opportunities in international markets,” Mr Robb said.
Mr Robb said the Agreement would also enhance the competitiveness of our high end, small and medium size manufacturers, including parts and component producers in areas such as Melbourne’s South East.
Korea is for example a major market for Australian automotive parts and components, such as gear boxes, engines and other items, and from today Korea’s 8 per cent tariff will be eliminated.
“The elimination of tariffs on Australian parts and components will enhance the competitiveness of our high end manufacturers and open up new opportunities in this major market,” Mr Robb said.
Mr Robb said that on top of today’s cuts, there will be a second round of cuts on New Year’s Day.
“These back-to-back tariff cuts provide a significant boost for our exporters at a time when Australian goods and services are in high demand,” Mr Robb said.
Mr Billson said a variety of service providers will benefit from the Agreement, with new access for legal, accounting and telecommunications services.
“The services outcomes in KAFTA will allow Australian SMEs to better access the Korean market, engage with millions of potential new customers and deploy their world-leading expertise,” Mr Billson said.
Mr Billson said under the Agreement, Australia has committed to eliminating its remaining tariffs on imports from Korea.
“Lower tariffs mean cheaper business inputs, supporting competitiveness and profitability for our small businesses and family enterprises,” Mr Billson said.
“Investment outcomes in KAFTA will also strengthen the ability of Australian businesses – large and small – to attract greater investment from Korea.
“KAFTA, together with our agreements with Japan and China, helps create an economic environment in which businesses can prosper. We want our SMEs to have every opportunity to expand their operations into offshore markets, generating jobs at home and boosting growth,” he said.
Austrade – the Government’s export promotion agency – provides valuable advice on opportunities overseas. Support for SMEs seeking export opportunities is also available via the Export Finance Insurance Corporation (EFIC) and the Export Market Development Grants (EMDG) programme.
Australian SMEs are encouraged to use a new step-by-step guide to accessing preferential tariffs on exports to Korea. The guide is available at www.dfat.gov.au/fta/kafta/fact-sheets/guide-to-using-kafta-to-export-and-import-goods.html.
Courtesy of the Trade Minister’s Office