Finance Finance News South Korea free trade details revealed

South Korea free trade details revealed

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The Federal Government will today release the full details of its free trade agreement with South Korea.

The deal, struck in December last year, is yet to be ratified by either country.

The agriculture sector celebrated the agreement, which will see significant tariff reductions on important commodities in one of Australia’s biggest export markets.

The Australian beef industry is the big winner; it’s already at a tariff disadvantage with its largest competitor in Korea, the USA, which already has a free trade agreement in place. The tariff gap between Australia and the US will continue to widen each year unless Australia ratifies its own agreement.

The proposed agreement would see beef tariffs of between 40 and 72 per cent phased out over 15 years.

The sugar industry is also pleased that the tariff on raw sugar would be lifted immediately under the proposed agreement. While the existing tariff is relatively small, Australia’s competitors in its important Korean market are currently subject to no tariff at all. Australia exports about 1 million tonnes of raw sugar to Korea each year.

A 35 per cent tariff on white sugar would be phased out over 15 years, while small quantities could be sent to Korea under a quota system, once the agreement is ratified.

It’s understood canned fruit exports would also see tariffs of 45 to 50 per cent phased out over five to 10 years under the agreement, while fruit and vegetable juice exports to Korea would phase out tariffs of between 30 and 54 per cent over the same period.