'Investment key to further ties with Korea'

Australian Ambassador to Korea William Paterson, left, celebrates the first anniversary of the Korea-Australia FTA at the Plaza Hotel in Seoul on Dec. 10. / Coutresy of the Australian Embassy

Australian Embassy marks 1st anniversary of FTA with Seoul

By Rachel Lee

Australian Ambassador to Korea William Paterson sees services and investment as the key to furthering the economic partnership between Australia and Korea under the Free Trade Agreement (FTA) that came into force a year ago.

“For business to realize the full benefits of the services aspect of the agreement, it is essential that both governments get their regulatory settings right,” Paterson said at the Plaza Hotel in Seoul on Dec. 10.

The Australian Embassy held the event to mark the first anniversary of the Korea-Australia FTA (KAFTA), which fell on Sunday.

“Eliminating unnecessary regulations and ensuring a level playing field for new entrants is crucial in attracting new business and new investment,” the ambassador said.

Jeremy Shin, FTA Implementation director at the Ministry of Trade Industry and Energy; Graham Dodds, chairman of the Australian Chamber of Commerce in Korea; and Je Hyun-jung, Korea International Trade Association (KITA) research fellow, shared their insights about the new keys to growth under KAFTA, such as liberalizing services, boosting two-way investment, improving regulatory settings and developing an innovation partnership.

“It’s been a positive year in trade relationships between both our countries, so it’s critically important for both of us as we face sharply slow global trade and maturing export industries,” Paterson said.

“Our already close bilateral relationship has continued to go from strength to strength not only in terms of trade but also more broadly.

According to KITA, Korea recorded $30.7 billion in trade with Australia in 2014.

Since the FTA, the nation’s exports to Australia have increased 32.5 percent, to about 11 trillion won.

The number of Korean passenger vehicles, in particular, exported to Australia from January to October increased more than 10 percent.

Because the FTA reduced import duties from 5 percent to 0 percent, the export of small vehicles has rocketed 93 percent. Midsize to large cars, on which the tariff rate for fell from 5 percent to 1.7 percent, has increased 13.7 percent.

Despite a positive figure, the ambassador said he wished Korea would take more interest in Australia.

“With the Korean economy, like many others, slowing significantly, we would have hoped to see more Korean interest in a stable, smart partner like Australia,” he said.

According to the embassy, Korea is the 15th largest investor in Australia.

Paterson also pointed out that while the tariff reductions in KAFTA would help ensure that the strong goods trade would continue, it was important to note that the growth of the economic partnership under the agreement would be driven by services and investment.

“Trade in services currently lags behind the trade in goods, at just 7 percent of the value of the two-way goods trade,” he said. “Investment is also very low compared with the other top five trading partners.”

The ambassador stressed the importance of the services liberalization of the KAFTA that “provides at least half of the answer especially when both Korea and Australia are looking for new drivers for economic growth.”

“It is most welcome that President Park Geun-hye has made services sector reform a priority for her administration, and is urging the National Assembly to take this up,” he said. .

Australia is Korea’s eighth largest importing source and 10th largest export market.