The South Korean Ministry of Trade, Industry and Energy announced that, following the conclusion of negotiations in December last year, South Korea and Australia initialed their bilateral free trade agreement (FTA) on February 10, and agreed to its signing within the first half of this year.

The Ministry said that both sides have agreed to work towards obtaining their respective internal procedural approvals to meet the target for signature of the agreement, and that the FTA should become effective as soon as possible, hopefully in 2015.

It was back in 2009 that Australia and South Korea agreed to launch bilateral FTA negotiations, but the talks had stalled a year later, mainly over the terms of the investor-state dispute settlement system to be included in an agreement. Negotiations were resumed last year as the new Australian Government looked to strengthen trade relations, not only with South Korea, but also with Japan and China.

Australia is looking to place its exporters on an equal footing with their American and European competitors, following the FTAs concluded by South Korea with the US and EU. Under the FTA, the two countries will remove tariffs on most products within ten years of the deal going into effect.

Independent modeling suggests that the treaty could be worth as much as AUD5bn (USD4.5bn) over the period between 2015 and 2030. The major benefits to Australia of an FTA are being seen to be in the agricultural, natural resources and services sectors, while it would also eliminate its remaining tariffs on auto imports from South Korea.

Currently, Australia is South Korea's seventh-largest, and South Korea is Australia's fourth-largest, trading partner. The countries' annual bilateral trade value has already reached over AUD32bn.

Source: Tax News

• Is Vietnam a Market Economy? U.S. Considers Status Upgrade
• Vietnam should seize opportunity to join global semiconductor supply chain
• Green economy, digital economy breakthrough of Vietnam-China ties: PM
• ASEAN steel industry needs support for decarbonization
• The fruit and vegetable industry has plenty of room for export in the five largest markets