In 2013-14 South Korea was Victoria’s fifth largest merchandise export market, worth $1.099 billion. Major items included aluminium ($288 million), liquefied propane and butane ($270 million), beef ($66 million), milk and cream ($41 million) and wool ($37 million). Over the same period, international education and tourism were important sources of service exports to South Korea for Victoria.

Independent modelling indicates that KAFTA will be worth over $5 billion in additional income to Australia between 2015 and 2030, and will result in an annual boost to the economy of around $653 million after 15 years of operation.

Victoria’s agricultural exporters stand to reap the benefits from the elimination and gradual reduction of tariffs on a range of export goods. Tariffs of up to 300 per cent will be eliminated on key agricultural exports, including beef, wheat, sugar, dairy, wine, horticulture and seafood. KAFTA will help Victoria exports compete on a more level playing field and enable industries, such as the beef, cheese and wine sectors to capitalise further on the diversifying tastes of Korea’s growing middle class.

Under KAFTA, South Korea will eliminate tariffs for all manufactured products (not including energy and mineral resources or forestry products) within seven years. Key Victorian manufacturing exports expected to benefit include pharmaceuticals, motor vehicles, engines, floating structures and electrical switchboards.

KAFTA will also provide new market openings for service suppliers, particularly in education, telecommunications, financial, accounting and legal services. This agreement represents some of the best services outcomes Australia has secured in any FTA. In particular, Victorian legal firms will be granted access to Korea’s legal consulting services market. Victorian firms are now permitted to establish representative offices in Korea and Victorian lawyers able to advise on Australian and public international law. Within two years, Australian law firms will be permitted to enter into cooperative agreements with local law firms, and within five years to establish joint ventures and hire local lawyers.

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