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Korea-Australia Free Trade Agreement

The Korea-Australia Free Trade Agreement (KAFTA) entered into force on 12 December 2014.

KAFTA eliminates or reduces barriers to the trade in goods between Korea and Australia. This benefits Australian businesses that seek to export Australian goods to Korea or want to import Korean goods for sale in Australia.

KAFTA sets Korean tariffs at zero for 84 per cent (by 2013 import value) of Australian exports on day one of KAFTA’s operation, rising to 95.7 per cent within 10 years and 99.8 per cent once KAFTA is fully implemented. KAFTA also sets Australian tariffs at zero on 86 per cent of Korean exports from day one, rising to 100 per cent in eight years.

Some of the key outcomes on entry into force of the agreement include:*

For agriculture, Korea eliminated tariffs on entry into force for raw sugar, wheat, wine, and some horticulture. Tariffs of up to 550 per cent on most other agricultural products will be eliminated within short time frames. Other key outcomes on agriculture include:

  • Beef: Korea will eliminate its 40 per cent tariff on beef by 1 January 2028, which will help to level the playing field for Australian beef exporters.
  • Dairy: duty free quotas for cheese, butter and infant formula and high tariffs will be eliminated on many dairy products by 1 January 2033.
  • 88 per cent of Australia’s manufactures, resources and energy exports enter Korea duty free following entry into force, with all remaining tariffs phased out by 1 January 2023.
  • Tariffs on priority products including liquefied natural gas, titanium dioxide, unwrought aluminium, automotive parts such as engines and gearboxes, and sea salt, were eliminated on entry into force.
  • Tariffs of up to 8 per cent on almost 90 per cent of Australian pharmaceutical products (including vitamins) were eliminated immediately, with the remainder to be phased out progressively by 1 January 2016.

For information on the ACCI KAFTA Certificate of Origin, CLICK HERE.

To find out how KAFTA can benefit your business refer to:

*Source: DFAT

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Gary Dawes
Manager, International Business
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