What is the Korea-Australia Free Trade Agreement and can it benefit my business?

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October 2015

On 12 December 2014, a free trade agreement between Korea and Australia (KAFTA) came into force, which will significantly improve market access in goods and services, benefiting Australian exporters.

Direct benefits for exporters

  • Since implementation, 84 per cent of Australian exports to Korea are now duty free
  • This will rise to 99.8 per cent on full implementation
  • The agreement will particularly benefit a range of food and wine exports, manufactured goods and service providers
  • In the first year of KAFTA alone, it is anticipated that trade liberalisation under the agreement will contribute A$226 million to Australia's GDP

Indirect benefits for exporters

  • Australian traders and investors will have up to two years guaranteed right to stay in Korea
  • Subject to certain restrictions, Australian exporters generally have equal access to Korean Government procurement
  • Service providers benefit from a relaxation of restrictions, e.g. financial service providers are able to provide financial services without establishing a commercial presence in South Korea  
  • Australian law firms are able to open offices in Korea, while accountants are able to provide tax advice
  • Education providers have greater access to the Korean market

Requirements

  • In order to access the tariff concessions provided for in KAFTA, goods must be of Korean or Australian origin
  • To claim preferential treatment, a certificate of origin must be held in respect of the export product, which can be produced by the exporter, producer or an authorised body

 

Find out more

For detailed information, please visit FTA tool here and DFAT here.

[KAFTA is] projected to create many thousands of jobs over the next decade, helping to underwrite our prosperity for years to come... I urge Australian businesses to take full advantage of this Agreement – Trade and Investment Minister Andrew Robb.