Korea, Australia conclude FTA negotiationsUpdated: 2013-12-06 AM 11:37:54 (KST)
Korea's trade ministry said Thursday
that it had finished negotiations for a free trade agreement with Australia, moving one step closer to scrapping tariffs on key exports.
The agreement on the free trade deal includes writing the investor-state dispute settlement system into the trade pact.
Australia was originally against including the system in the proposed agreement, which allows overseas businesses to take action against Australia for apparent breaches.
"Korea invests alot in Australian resources and energy. In order to protect these investments, the ISD settlement mechanism had to be part of the agreement, and we put a lot of effort into making sure it was."
The two countries aim to cut tariffs on most of the products traded within 8 years after the trade deal goes into effect.
Once it does go into effect, tariffs on Korean automobiles and electronics goods like televisions that currently have an average tariff of 5 percent, will be cut immediately and completely.
Tariffs for auto parts, meanwhile, will be cut within 3 years.
Korea's agriculture sector, however, is expected to take a hit from the trade pact.
Tariffs on Australian agricultural exports such as wheat, dairy and beef will be eliminated altogether.
Korea's trade ministry said that it tried to minimize the trade deal's impact on local farmers by agreeing to gradually phase out tariffs on Australian beef over 15 years.
The agreement also exempts Korea from opening its markets to a number of agricultural products like rice, apple and potatoes.
Before the deal takes effect, the two nations must go through their own approval processes, which will likely be completed in the first half of next year.
Hwang Ji-hye, Arirang News.
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