Following its signature by Trade and Investment Minister Andrew Robb on 8 April, KAFTA was tabled by Mr Robb in Parliament on 13 May 2014.
The agreement will now be considered by the Joint Standing Committee on Treaties (JSCOT), which is receiving submissions on KAFTA until 13 June. Australia and Korea are aiming to complete their domestic treaty processes, including passage of necessary legislation, towards the end of 2014. The agreement will enter into force 30 days after each country exchanges notifications confirming completion of their domestic processes.
The following outcomes are of particular interest:
- Korea will eliminate its 40 per cent tariff on beef in 15 equal annual stages.
(This will help level the playing field for Australian beef exporters, relative to the US.)
- Korea has the right to apply an agricultural safeguard on some beef products for 15 years.
(This discretionary safeguard can apply only on volumes above the safeguard trigger level set at 154,584 tonnes in year one, increasing by 2 per cent per annum (compound).)
(The safeguard trigger is set above current trade levels.)
(Volumes above the trigger level can attract a tariff that will fall from 40 per cent to 30 per cent to 24 per cent in five year intervals.)
- Korea will eliminate its 18 per cent tariff on bovine offal over 15 years (with no safeguard).
- Korea will eliminate its 72 per cent tariff on processed beef products over 15 years (with no safeguard).
- Korea will eliminate its 15 per cent tariff on Australian wine (including sparkling wine, red wine and white wine) on entry into force.
Malt and malting barley:
- Korea will provide Australia with a duty-free quota on malt and malting barley of 10,000 tonnes in the first year, growing two per cent per annum (compound) for 15 years. This is in addition to Korea’s WTO tariff rate quota on malt and malting barley of 30,000 tonnes and 40,000 tonnes respectively.
(Korea will also eliminate its out-of-quota tariffs of 269 per cent for malt and 513 per cent for malting barley over 15 years. A safeguard can apply on volumes above 147,486 tonnes during these 15 years. After that period, trade will be completely liberalised.)
- Tariffs of up to 304 per cent on potatoes (for chipping) will be eliminated on entry into force from December to April each year. For other months, the 304 per cent tariff will be eliminated over 15 years.
Southern bluefin tuna:
- Korea’s tariff of 10 per cent on frozen southern bluefin tuna will be eliminated after three years.
- Korea’s tariff of 20 per cent on fresh or chilled southern bluefin tuna will be eliminated on entry into force.
- Korea’s tariff of 20 per cent will be eliminated after three years.
- Korea’s tariffs of 1-3 per cent will be phased out over 10 years.
Petroleum gases and other gaseous hydrocarbons (including natural gas, propane and butane):
- Korea’s tariffs of 3-5 per cent will be eliminated immediately on entry into force.
Beauty or make-up preparations:
- Tariffs of 6.5 per cent on a range of products will be eliminated on entry into force, or phased out over three or five years.
Pharmaceuticals (including vitamins):
- Korea’s tariffs on pharmaceutical products range from 0-8 percent
(Tariffs on almost 90 per cent of pharmaceutical products will be eliminated immediately on entry into force, with the remainder phased out within three years.)