KAFTA KAFTA KAFTA KAFTA
KAFTA KAFTA KAFTA KAFTA KAFTA KAFTA KAFTA KAFTA KAFTA KAFTA KAFTA KAFTA KAFTA KAFTA KAFTA KAFTA Summary Summary Summary Summary Summary Summary Summary Summary Summary Summary Summary Summary Summary Summary Summary Summary Summary Summary Summary Summary
KAFTA Summary
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I Negotiation History
□ 7 official meeting since announcement of opening KAFTA negotiation in May 2009
□ 4
thof December, 2013 : Conclude KAFTA in Bali
□ 10
thof February, 2014 : Initial final text of KAFTA
□ 8
thof April, 2014 : Signature of KAFTA
□ 12
thof December, 2014 : KAFTA enter into force
《 Reasons of KAFTA 》
q (Australian Market) Australia is 12
thlargest economy in the world (total GDP
$1,586b in 2012). Australia also has a domestic market that has strongest buying power in the world (GDP per capita $67,347)
ㅇ Australia has comparative advantage in primary industry and service industry, however Australia relies on imports products for manufacturing products.
q (Resource Rich country) Korea expecting strengthen bilateral cooperation in mining sector with Australia and expanding stability of investment and supply of resources as Korea imports 1/3 of total mineral resource from Australia.
ㅇ Australia is known as safe place to invest, because of its political reliability and transparency of economy.
q (Trade Structure) Trade structure between Korea and Australia is complementary.
Korea exports manufacturing products as major exports and Australia exports energy, resources as major exports.
※ Merchandise Trade with Australia in 2013-14
- Export to Australia : Refined Petroleum ($4,009m), Passenger motor vehicle ($2,058m), Pump parts ($842m )
- Import from Australia : Iron Ore($6,096m), Coal($5,216m), Beef($892m)
- 2 -
II KAFTA at a Glance
◈ KAFTA is a comprehensive agreement that composed 23 chapters which include Goods, Service·Investment, Government Procurement and Intellectual Property.
□ (Goods market access) Both parties will eliminate tariff for most trade goods in 10 years. (Australia will eliminate tariff for most trade goods in 5 years)
< Summary of Goods market access >
① To reflect Korean domestic market sensitivity, except or keep current tariff rate(rice, fruit and etc) for 171 goods and long term elimination of tariffs for 509 goods.
- To minimize impact from duty free access to domestic market, Government has launched long term (15years) elimination of tariffs and set the Agricultural Products Safe Guard for beef products.
- Considering sensitivity on agricultural and fishery industries in Korea, Government has prepared various methods to protect domestic industries such as Agricultural Products Safe Guard, tariff rate quotas, seasonal custom duties and etc.
② Tariff on automotive(tariff rate 5%, 25% of Korea’s total export) related product will be eliminated in 3 years
- Tariff on most of major export product, such as consumer electronics (5%
tariff), electric equipments (5% tariff for most of products), general machine (5% tariff) will be eliminated immediately except automotive parts (remove 5% tariff in 3 years)
□ (Service․Investment Market Access) Korea and Australia have agreed to open Service․Investment Market, on par with KUSFTA and AUSFTA.
※ Australia has agreed to provide to access its particular market, such as audio visual co-producing, at higher level than AUSFTA.
□ (Government Procurement Market Access) Australia has provided to access all level of government procurement market (federal, state and local), even Australia is not joined WTO Government Procurement Agreement.
□ (Agreement) KAFTA has introduce ISDS to protect both government to regulating in the public interest. Agreement also recognize products from Gaeseong industrial complex as Korean origin products.
□ (Cooperation) Korea and Australia agreed to strengthen its cooperation in various sectors such as Agriculture, Fishery, Forestry and Energy․Resources.
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III Summary of Goods Concession
($ Million, %)
Type of Concession
Korea Australia
No of
Items Rate Import from
Australia Rate No of
Items Rate Import from
Korea Rate on entry into force
(A) 8,940 75.2 11,097 72.4 5,450 90.8 4,248 86.0 duty-free
access 1,932 16.3 8,391 54.7 2,780 46.3 2,099 42.5 remained
duty 7,008 59.0 2,706 17.7 2,670 44.4 2,149 43.5
3 years(B) 1,019 8.6 367 2.4 115 1.9 434 8.8
5 years(C) 564 4.7 2,684 17.5 411 6.8 256 5.2
7 years(D) 265 2.2 15 0.1 - - - -
8 years(E) - - - - 32 0.5 1 0.0
in 8years total
(A+B+C+D+E) 10,788 90.8 14,162 92.4 6,008 100 4,939 100
10 years 413 3.5 335 2.2 - - - -
above 10 years 492 4.1 804 5.2 - - - -
50% reduction in
10 years 12 0.1 0 0.0 - - - -
Seasonal Custom Duty 5 0.0 3 0.0 - - - -
Except from Concession
/Keep current level of tariff 171 1.4 26 0.16 - - - - Total 11,881 100 15,330 100 6,008 100 4,939 100 ※ This information is based on HS code in 2009(Korea) and 2007(Australia)
for Number of Items, information for amount of imports has collected between 2007-2009 average.
