Yesterday, the Australian Government released the text
of the Korea-Australia Free Trade Agreement, or "KAFTA"
to the Australian public.
As detailed in our previous HH CTT Update on 6 December 2013,
the agreement was concluded by the Australian Minister for Trade
and Investment, the Hon Andrew Robb and his counterpart in early
Being our third largest export market and fourth largest trading
partner, the benefits to Australian businesses are substantial.
According to the Department of Foreign Affairs and Trade, at the
time the agreement comes into force, 84 per cent of the value of
Australia's exports to Korea will enter duty free. Once fully
implemented, the current tariffs on 99.8 per cent of Australian
exports will be eliminated.
As promised, the agreement includes a controversial
Investor/State Dispute Resolution mechanism (which provides a
foreign investor with the right to initiate dispute settlement
proceedings against a foreign government). To alleviate the fears
of those opposed to such clauses, the published text contains
explicit safeguards to protect legitimate government regulation in
areas such as public health and the environment. It is also
restricted to breaches of an investment obligation provided for by
the KAFTA or under an agreement with the other Party's
The rules of origin (ROO) clauses provide that a good will
originate under the KAFTA if it is wholly obtained or produced
entirely in the country or is produced entirely in Korea and/or
Australia from specified materials under the ROO Chapter.
Alternatively, goods manufactured in Korea and/or Australia using
inputs from other countries will originate under the KAFTA if the
product meets the specifications outlined in the ROO Chapter.
Reflecting the trade facilitation nature of the KAFTA, the
agreement enables Australian and Korean exporters and manufacturers
to self-certify the origin of the goods through completing a
Certificate of Origin (COO). The one COO can apply to multiple
importations of the goods specified.
The TPP could have a significant positive impact on the investment and financial services of Australia and Singapore.
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