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Australia seeks FTA with Korea

Korea Times

Australia Seeks FTA with Korea

By Lee Hyo-sik

Staff Reporter

CHEJU - Australia is urging South Korea to kick off negotiations for a free trade agreement (FTA) to facilitate a growing bilateral trade in raw materials, agricultural and manufactured goods, according to a senior Australian official.

Peter Costello, Treasurer of Australia, said that an FTA is an effective device to increase bilateral trade in a written interview with The Korea Times.

``Our trading relationship with Korea is growing at a fast pace — more than 7 percent per annum between 1999 and 2004. Korea is now Australia’s fourth most important trading partner and trade between the two countries was $10.5 billion in 2004.’’ he said.

Costello added that the two nations have diverse economies with a broad interest in the global economy, but with comparative advantages in particular areas. Australia exports raw materials, foodstuffs and services to Korea, and Korea exports finished manufacturing products such as cars, telecommunications equipment and electronic goods.

``But South Korea has so far indicated that an FTA with Australia is not a priority at this time,’’ he said. ``But the measure of the success of the bilateral relationship is not whether or not we have an FTA.’’

He said that the multilateral negotiations at the WTO are where Australia and Korea can make large gains as a successful Doha Round should not just liberalize trade in manufactured goods and services, but also address issues in agricultural trade.

``Liberalizing agricultural trade will benefit countries like Korea and Australia and is crucial to the delivery of the Doha Round’s development and poverty alleviation goals,’’ he stressed.

Australia currently has FTAs with New Zealand, Singapore, the United States and Thailand.

``We are negotiating with Malaysia, China, the United Arab Emirates, and ASEAN along with New Zealand. A study into the possible benefits and costs of an FTA is being conducted with Japan,’’ Costello said.

He added that the Closer Economic Relations Agreement with New Zealand signed in 1983 has become one of the most comprehensive free trade agreement in the world and has completely liberalized goods trade and almost completely liberalized trade in services. Labor is largely free to move between the two countries.

``An FTA with Singapore went into effect in July 2003 and has already had its first review, aimed at finding further areas for liberalization,’’ he said, adding that the liberalization eliminated all tariffs between the two nations, and included services on a broad basis, except those excluded for specific policy reasons.

Costello noted that Australia’s agreements with Thailand and the U.S. went into effect in January and that they will facilitate even greater levels of trade and investment.

Touching on growing economic ties with APEC economies, Costello said that APEC members constitute 10 of Australia’s 12 most important trading partners, and more than two-thirds of Australia’s trade is with APEC economies.

Total Australian trade with APEC has grown at 6 percent per annum over the five-year period to 2004.

``APEC’s growing trade with the region reflects our strong economic performance characterized by sustained growth combined with low inflation, low interest rates and low employment,’’ he said.

He added that Australia is supportive of global free trade as it is the best way to promote lasting improvements to the well-being of our people, and also of the people of the region and the entire globe.

As for Australia’s hosting of the 2007 APEC summit and finance ministers meeting, Costello said that the Australian government has already established a taskforce within the Prime Minister’s Department to organize the ministerial meetings for APEC 2007.

``Within my own department, we have established a secretariat to develop a robust policy agenda and manage meetings for APEC Finance Ministers in 2007,’’ he said.

Costello said that these groups have met with Korean officials to discuss the planning of APEC meetings and have gained valuable insights into various tasks.