Australia-Republic of Korea Free Trade Agreement negotiations

Fact Sheet: Trade in Goods

Last updated 13 August 2014

Fact Sheet: Trade in Goods [PDF 73 KB]

The Korea-Australia Free Trade Agreement (KAFTA) is a comprehensive agreement that substantially liberalises trade with Korea and creates significant new commercial opportunities for Australian businesses.

KAFTA achieves high levels of tariff elimination

KAFTA helps to address non-tariff barriers

KAFTA seeks to minimise red tape

KAFTA Market Access Outcomes – Agriculture

Beef

Beef is Australia’s biggest agricultural export to Korea, worth $788 million in 2013.  Korea is Australia’s third-biggest export market for Australian beef.  Key KAFTA outcomes include:

Sugar

Korea is Australia’s second largest export market for sugar, receiving almost one third of our sugar exports, worth $336 million in 2013. Key KAFTA outcomes include:

Wheat

Australia’s exports of wheat to Korea were worth $317 million in 2013.

Dairy

Australian dairy exports to Korea were worth $87 million in 2013 despite very high tariffs.  The industry will benefit from immediate duty-free quotas for key exports and the elimination of tariffs up to 89 per cent on most other dairy products.  Key KAFTA outcomes are:

Malt and Malting Barley

Oilseeds

Lamb/goat/pork

Korea will eliminate its 22.5 per cent tariff on all sheep and goat meat over 10 years.  Tariffs on key pork exports of 22.5 to 25 per cent will be eliminated in five to 15 years.

Seafood

Key products, such as frozen southern bluefin tuna (current tariff 10 per cent) and rock lobsters (20 per cent) will enter duty free after three years.

Wine

Australia’s wine trade with Korea is significant, with over $8 million worth of wine exported to Korea in 2012-13. Wine exports currently face a 15 per cent tariff. 

Horticulture

KAFTA will provide quick tariff elimination on most of our horticulture exports to Korea.  Key KAFTA outcomes include:

For some of Korea’s more sensitive horticulture products, seasonal tariff elimination during Australia’s exporting months was achieved.

Exclusions

Despite sustained effort by Australia to have all products included, some products were too sensitive for Korea to include in the FTA.  These products include: rice, unhulled barley, milk powders, condensed milk, some abalone, ginger, apples, pears, watermelon, walnuts, onions, capsicums, garlic, honey, oak mushrooms, chestnuts, shallots, some berries, green tea, ginseng, sesame oil and frozen pork belly.  Korea is not a significant market for these products, which account for 0.2 per cent of Australia’s exports to Korea.

KAFTA Market Access Outcomes – Resources, Energy and Manufacturing

Resource commodities (energy and mineral products) and simply-transformed manufactures (comprising mainly unwrought metals such as aluminium and copper) accounted for over three-quarters of the value of Australia’s merchandise exports to Korea in 2012-13. While many Australian mineral and energy exports to Korea already enter duty free, Korea applies tariffs of up to 8 per cent on a range of priority resource products, and tariffs of up to 13 per cent on manufactured products. Under KAFTA, Korea will eliminate tariffs on manufactures, resources and energy products within 10 years.

Crude Petroleum

Natural Gas

Titanium Dioxide

Unwrought Aluminium

Pharmaceuticals (including vitamins)

Automotive Parts and Accessories

Sea Salt