Australia has continued to record strong increases in agricultural exports to Korea, driven largely by the Korea-Australia Free Trade Agreement (KAFTA).
Despite strong competition from the US and others, the reduction in beef tariffs from pre-KAFTA 40 per cent down to 26.6 per cent from January 1, next year is enabling Australia to remain a key beef supplier to Korea, with Australian beef exports worth $1.2 billion in 2016-17.
Since KAFTA came into force on 12 December 2014, the value of lamb exports to Korea have increased 298 per cent to $95.7 million in 2016-17 – a 96 per cent increase on 2015-16.
“Even when you compare just 2015-16 and 2016-17, you can see how recent tariff cuts are significantly improving the value and volume of our agricultural exports to Korea,” said Deputy Prime Minister and Minister for Agriculture and Water Resources, Barnaby Joyce.
“Cheese exports increased 36 per cent to $53.1 million, goat meat exports increased 40 per cent to $14.8 million and orange exports increased 48 per cent to $2.9 million.”
Mr Joyce said the benefits from KAFTA were another powerful reminder of how critical free trade deals are for our nation's future.
“Improving agricultural market access is a priority for the Coalition Government, as exports underpin the profitability of our $60 billion agriculture sector, boost farmgate returns and support Australian jobs,” he said.
“We worked hard to finalise KAFTA back in 2014, because we knew the significant benefits the tariff cuts could provide for Australia – and we are seeing more and more of those benefits come to fruition.
“There's no doubt Australia's clean, safe produce is in demand in Korea, with exports of agrifood products flourishing since the introduction of KAFTA.
“With the fifth round of tariff reductions coming into effect on 1 January 2018, this will deliver yet another boost for Australian exporters, farmers, producers and Australian agriculture.”
- In 2016-17, Korea was Australia’s fifth largest agricultural export markets valued at $3.3 billion.
- Once the rollout of KAFTA is complete, 98 per cent of Australia’s agricultural exports to Korea will face zero tariffs.
- Free trade agreements provide significant benefits for exporters, by reducing or eliminating tariffs, so making Australian exports more price competitive in that market.
- The Korea-Australia Free Trade Agreement (KAFTA) entered into force on December 12, 2014.
- The fifth round of tariff cuts under KAFTA come into effect on January 1, 2018 and will include:
- Beef tariff falling to 26.6 per cent, down from pre-KAFTA 40 per cent.
- Tariff on both sheepmeat and goatmeat falling to 11.2 per cent, down from pre-KAFTA 22.5 per cent.
- Increased zero-tariff quota for cheese from 5,059 metric tons in CY2017 to 5,211 metric tons in CY2018, and reduced out-of-quota tariff from 28 per cent to 26 per cent, with the out-of-quota tariff eliminated by January 1, 2031
- Out-of-quota tariff for oranges (exported between April 1 and September 30) reduced from 15 per cent to 10 per cent from January 1, 2018, with the season out-of-quota tariff between 1 April and 30 September eliminated by 1 January 2020.