David Fawcett (SA, Liberal Party) Share this | Hansard source

I present the 142nd report of the Joint Standing Committee on Treaties, tabled on 13 May 2014, and I seek leave to move a motion in relation to the report.

Leave granted.

I move:

That the Senate take note of the report.

I present the Joint Standing Committee on Treaties report 142, containing the committee's views on the free trade agreement between the government of Australia and the Republic of Korea. The Korea-Australia Free Trade Agreement, better known as KAFTA, was tabled in parliament on 13 May 2014. Free trade agreements are becoming increasingly the means by which trade liberalisation is encouraged, opening up market access and strengthening bilateral relationships. This, indeed, is the eighth free trade agreement that Australia has signed.

Korea is one of Australia's most important trading partners, our third largest export market, our fourth largest trading partner and a growing investment partner. Currently, Australia faces various tariff and non-tariff barriers and restrictions in Korea. The average tariff on imports into Korea from Australia is 16.8 per cent, with an average tariff on agricultural goods of 53.6 per cent and tariff peaks of over 500 per cent. KAFTA will eliminate these very high tariffs on a wide range of Australian goods, including beef, wheat, sugar, dairy, wine, horticulture and seafood. It will also create new market openings in key areas of commercial interest to Australian services providers, including legal, accounting, financial, education and other professional services.

KAFTA is expected to be worth some $5 billion in additional income to Australia between 2015 and 2030. It is expected to provide an annual boost to the Australian economy of approximately $650 million after 15 years of operation. In its first year of operation, KAFTA is expected to create 1,700 jobs. Eighty four per cent of Australia's current exports by value will enter Korea duty free. Agricultural exports are expected to increase by 73 per cent and manufacturing by 53 per cent by 2030 as a result of the agreement.

The committee found that a range of benefits are likely to flow from the implementation of KAFTA for Australian businesses, industry and exporters. Apart from the direct value of tariff reductions, increased competitive advantage and potential future opportunities were identified as tangible positive results. Witnesses emphasised the importance of the agreement in protecting our competitive edge in the Korean market as Korea signs free-trade agreements with our major competitors including the United States, the European Union, Chile and ASEAN countries.

We identified and examined a number of issues that are causing concern amongst the wider community, in particular, the perceived dangers associated with the inclusion of an investor-state dispute settlement mechanism in the agreement and the possible changes to intellectual property rights. More generally, ongoing dissatisfaction with the treaty-making process in Australia was drawn to our attention. However, we recognised the constitutional constraints on the process in Australia and we highlighted the improvements that have been made over the last two decades. Overall, the committee is satisfied that KAFTA will provide substantial economic benefit not only to Australian business and industry but also to the broader community. On behalf of the committee, I commend the report to the Senate.