3 April 2014
PRIME MINISTER Tony Abbott will ink a landmark deal with South Korea next Tuesday to create 1000 Aussie jobs a year and cut the cost of imported cars and clothing.
Three in five jobs created will be in NSW and the rest in Victoria with Australia’s beef, dairy, vegetable, fruit and nut growers the biggest beneficiaries.
Korea has already signed similar FTAs with the United States and European Union and failure to reach a deal would have seen a slump in Australian exports.
Instead, Australian exports to Korea will increase by 25 per cent, confidential modelling for the Department of Foreign Affairs and Trade reveals.
The biggest jobs boost will be next year, when 1745 jobs will be created. But the boost will continue for at least 15 years, with 950 new jobs expected in 2030.
This will help to offset some looming job losses in manufacturing.
However, the trade deal will also add to those pressures. Lower tariffs on imported Korean textiles, footwear, auto parts and steel products will make it harder for Aussie manufacturers to compete.
Korean tariffs on imported cigarettes and tobacco will be slashed from 40 per cent to 15 per cent, making it cheaper for international giants like Philip Morris, which this week announced 180 job losses at its Melbourne factory, to manufacture there.
Trade Minister Andrew Robb this week acknowledged the losses, but said they will be outweighed by job gains. “You do see job losses; they’re very prominent in the community. What you don’t see is the new jobs that are created,” he said.
Lower tariffs will also make imported Korean goods like cars, clothes and electronics cheaper for Australian consumers.
South Korea is Australia’s fourth largest trading partner and the biggest buyer of Australian sugar.
The Department’s modelling shows job gains will be strongest in the beef industry, followed by dairy, raw milk, vegetables, fruits, nuts and sugar industries.
Overall it will boost Australia’s economic output by $5 billion over the period to 2030.
A research fellow at the Centre for Independent Studies, Stephen Kirchner, said the benefits of freer trade outweighed the negatives. “We will get more jobs overall through increased trade and investment with South Korea.”
Tony Abbott will also use next week’s Asia tour to push for progress on a free trade agreement with Japan, and with Australia’s largest trading partner, China.
The deal with China has been nine years in the making, but Mr Abbott has promised a deal within his first year.
Courtesy of Perth Now
3 April 2014