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The South Korea-Australia Free Trade Agreement (SAFTA) is a bilateral trade agreement signed between the two countries in 2014 and came into effect on December 12, 2014. The agreement provides for the elimination or reduction of tariffs on a range of goods and services traded between the two nations, making it easier and more cost-effective for Australian companies to export to Korea and vice versa.
The agreement was negotiated over a number of years and both countries welcomed it as a significant milestone in their economic relationship. South Korea is Australia`s fourth-largest trading partner and the SAFTA has played a crucial role in strengthening and deepening this trading relationship. The agreement has provided Australian businesses with a competitive edge in the Korean market, particularly in sectors such as agriculture, manufacturing, and services.
Under the SAFTA, over 99% of Australian goods exported to Korea now enter duty-free, with most of the remaining items having their tariffs reduced over time. Australian exporters are benefiting from the elimination of tariffs on beef, dairy, wine, seafood, and horticulture products, which are highly sought after in the Korean market. The SAFTA has also opened up new opportunities for Australian service providers, such as legal, financial, and education services.
In addition, the agreement has brought about improved market access for Australian investors in Korea. Australian companies seeking to invest in Korea can now do so with greater confidence, thanks to the safeguards put in place to protect foreign investors. This has resulted in an increase in Australian investments in Korea, particularly in the areas of mining, energy, and infrastructure.
Overall, the SAFTA has been a significant success for both South Korea and Australia, providing mutual benefits for both countries. Australian exporters are now enjoying preferential market access to Korea, while Korean businesses are gaining better access to the Australian market. The agreement has enhanced the economic relationship between the two countries, creating new opportunities for trade and investment in diverse sectors.
In conclusion, the South Korea-Australia Free Trade Agreement has been a victory for both countries, deepening trade and investment relationships while also providing long-term benefits for businesses and consumers alike. Its success serves as an example of the positive outcomes that can result from trade agreements with strategic partners.
