AUSTRALIA's new free trade agreement with South Korea is likely to add about $650 million a year to the national economy once it comes into full force.

That is the estimate of independent modelling commissioned by the Federal Government, which also shows the Korea-Australia Free Trade Agreement will create at least 15,000 jobs between 2015 and 2030.

In 2015 the modelling shows job gains of 1750, with average gains of 1000 in each and every year out to 2030. The government's modelling also shows the KAFTA will add $650 million dollars to the Australian economy annually.

Agricultural exports to South Korea are expected to be 73 percent higher after 15 years of trading, as a result of the FTA, and overall exports to South Korea will be 25 percent higher.

Trade and Investment Minister Andrew Robb and his South Korean counterpart, the Minister for Trade, Industry and Energy Yoon Sang-jick, formally signed the Korea-Australia Free Trade Agreement (KAFTA) in Seoul in early April.

This comes on the back of the successful conclusion of negotiations for an Economic Partnership Agreement with Japan, Australia's  second biggest trading partner.

"The government's swift conclusion of these historic agreements sends a strong signal that Australia is indeed open for business," Mr Robb said.

"With one in five Australian jobs linked to trade, these agreements are good for the economy, good for growth and good for job creation," Mr Robb said.

"Building stronger trading relationships in Asia is critical to Australia's economic future.  Signing KAFTA today takes us closer to realising our goal of finalising FTAs with our major North Asian partners – China, Japan and South Korea – which together account for 37 per cent of Australia's overall trade and two-thirds of our total goods exports," Mr Robb said.

South Korea is Australia's fourth-largest trading partner, with bilateral trade worth $32 billion in 2012.

KAFTA will significantly boost Australia's position in this major market where competitors like the United States, European Union and ASEAN countries are already benefitting from preferential access.

When KAFTA starts, 84 percent of Australia's exports, by value, to South Korea will enter duty free, rising to 99.8 percent on full implementation of the agreement. There will also be significant new market openings in services and investment.

Mr Robb said he expected KAFTA to be in force by the end of this year.

The full text of the Korea-Australia FTA can be accessed on the Department of Foreign Affairs and Trade website: www.dfat.gov.au/fta/kafta/

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THE RATE of trade growth for the Northern Territory was a stand-out in 2012-13, but agricultural exports from other states recorded healthy growth too, according to the latest report from the Department of Foreign Affairs and Trade (DFAT). 

 The Northern Territory’s rate of trade growth accelerated in 2012-13. Both export and import volumes were up more than 15 percent on the previous year, according to the DFAT report, Australia's Trade by State and Territory 2012-13.

Exports volumes from Western Australia and Queensland also grew strongly, up 9 percent and 6 percent, respectively.

Australian farmers gained a 10 percent increase in exports of unprocessed food to $15.2 billion. 

Exports of oilseeds, mainly canola, increased strongly for Victoria and New South Wales. Both states were up around 100 percent to $721 million and $469 million respectively. 

Queensland registered strong growth in exports of vegetables, up more than 50 percent to $455 million.

Western Australia’s wheat exports were up 46 percent to $2.7 billion.

Western Australia remained Australia’s export powerhouse accounting for $122.7 billion – or 41 percent – of Australia's total exports, followed by New South Wales and Queensland with 21 percent and 18 percent, respectively.

New South Wales remained Australia’s leading destination for imports, accounting for 34 percent (or $109.4 billion), followed by Victoria, Queensland and Western Australia.

DFAT publishes publishes an extensive range of trade and economic statistics, designed to improve knowledge and assist the development of trade industries. Various reports and historical trade statistics are available publicly on the Department of Foreign Affairs and Trade website.

To assist Australian businesses, DFAT also offers a trade data consultancy service, which can produce reports tailored to specific requirements. For further information, email  This email address is being protected from spambots. You need JavaScript enabled to view it. This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

The state-based statistical guide to exports and imports of goods and services is available at: Australia's Trade by State and Territory 2012-13.

http://www.dfat.gov.au/

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EXPORTS enjoyed a surge at the end of 2013 – possibly linked to falls in the Australian dollar – and helped Australia record a decent export performance for the year, according to the Australian Bureau of Statistics.

Port of Brisbane: Exports climb and shipping gets busy.

Trade data shows exports rose by more than six percent to reach a record $319 billion, the third consecutive year exports have exceeded $300 billion.

Increases were recorded across the board, with rural exports up nine percent, resources up eight percent, services up 6.5 percent, and manufactures up 1.6 percent.

According to Federal Trade and Investment Minister, Andrew Robb, these export outcomes resulted in Australia’s trade deficit narrowing by 69 percent from the previous year to $7.2 billion in 2013.

For the month of December 2013, Australia recorded a trade surplus of $468 million, with exports rising 3.7 percent, seasonally-adjusted, to $28.5 billion.

This more than offset the 2.3 percent rise in imports.

Mr Robb said increases in exports were recorded in most sectors. Resources exports rose 4.4 percent to $14.6 billion with other mineral fuels rising 12 percent, metal ores and minerals 2.4 percent, and coal, coke and briquettes 4.4 per cent.

Rural goods contributed to the rise in exports, up 17 percent to $3.6 billion, driven by cereals and cereal preparation exports, which rose 78 percent during the month.

Manufactured exports also rose, up 8.5 percent to $3.6 billion, driven by higher metals and transport equipment exports. These increases were partially offset by falls in exports of non-monetary gold, down 28 percent and services, down 0.5 percent.

Imports increased 2.3 percent to $28 billion. This was largely driven by capital goods, which increased 4.4 percent to $5.6 billion and consumption goods, which rose 2.8 percent to $6.9 billion.

Australia’s goods exports (not seasonally adjusted) to East Asia continue to rise, reaching $19.3 billion in December to be 24.6 percent higher from a year ago.

Mr Robb said the Australian Government was committed to supporting trade exposed businesses by reducing business costs to help make them more profitable and Australia more competitive as a nation.

“This includes a serious attack on regulation, removing unnecessary taxes such as the mining and carbon taxes and streamlining the approval process for major projects,” Mr Robb said.

www.dfat.gov.au 

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NEW ZEALAND is far better equipped to capitalise on globalisation than Australian business, according to the latest study by international accounting and consultancy network UHY. Australia ranked 15th, with Russia, while New Zealand placed equal third, with the UK and Netherlands, out of 27 leading nations examined.

David Tomasi, UHY Haines Norton chairman.

UHY Haines Norton Australia and New Zealand chairman, David Tomasi said Australia was in danger of slipping even further behind countries on the list if it did not plan for the post resources boom. Australia could, however, take some heart from the survey’s results for competitors Canada,  the US and Japan – placed 21st, 25th and 27th, respectively.

UHY’s taxation and business advisory professionals in 27 countries rated their economies on several factors including taxation and trade policy, how internationalised an economy already is and how well positioned it is to take advantage of future globalisation of trade.

The factors examined in UHY’s study included: how successful a country has been in negotiating favourable tax arrangements with potential trading partners; how successful it has been in growing exports; how important a part trade already plays in its economy; how much tax it imposes on companies ‘repatriating’ overseas profits; how it is rated in the World Bank’s ‘Ease of Doing Business’ survey; and labour costs.

Assessed on these factors, Australia scored 4.7 out of a maximum of 10, placing equal 15th with Russia. Significantly, this was well behind New Zealand which scored 6.0, placing it equal third out of the 27 nations studied.

“Whilst the recent correction to the Australian dollar helps to make our exports more competitive, our manufacturing industry has been decimated over the past decade or so,” Mr Tomasi said.

“A lot needs to be done to improve this and put Australia in a position where it gets maximum benefit from globalisation.

“An adjustment of our high labour costs is not realistically achievable in the medium term. If Australia wants to improve our attractiveness to international businesses looking to establish operations in our region we need to work on other factors to counter it.

“One area in particular is to improve productivity and another is to continue to develop and encourage high value specialist industries. An adjustment to government attitudes and policies is also needed if we are to achieve any of these.” Mr Tomasi said.

Germany topped the ratings with a score of 6.4 out of 10, while Slovakia was not far behind on 6.3 points. China was the best performing of the world’s top three economies with a score of 4.6, and India was the best-performing BRIC (Brazil, Russia, India, China) with a score of 5.1, helped by its low labour costs with an average monthly salary less than half as high as China’s.

UHY Haines Norton is an association of independent accounting and consulting firms in Australia and New Zealand with 39 Partners, over 280 staff and offices in 10 locations. UHY Haines Norton is a member of UHY, an international network of independent accounting and consulting firms with offices in over 270 major business centres in 86 countries.

www.uhyhn.com 

UHY GLOBALISATION READINESS SURVEY

Rankings show 27 countries’ ability to take advantage of future globalisation of trade, with marks out of a possible 10.

1 Germany 6.4                        15 Russia 4.7

2 Slovakia 6.3                         15 Australia 4.7

3 Netherlands 6.0                    17 China 4.6

3 New Zealand 6.0                   17 Uruguay 4.6

3 United Kingdom 6.0               17 Spain 4.6

6 Denmark 5.4                         20 Mexico 4.4

7 France 5.3                             21 Canada 4.3

8 Czech Republic 5.1                 21 Austria 4.3

8 India 5.1                               23 Israel 4.1

8 Croatia 5.1                            24 Nigeria 4.0

8 UAE 5.1                                 25 Italy 3.7

12 Romania 5.0                         25 United States 3.7

12 Brazil 5.0                             27 Japan 3.0

12 Ireland 5.0

Note: Countries’ overall scores are based on their rankings for the detailed measures included in the study. Data drawn from: the World Bank, World Trade Organisation, International Labour Organisation and national governments.

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