AKBC-KABC Joint Meeting
I'm certainly pleased to be here today. I'd like to acknowledge my former colleague and good friend Simon Crean, Chair of the Australia Korea Business Council; Mr Chair Jong-oo, Chairman, Korea Australia Business Council; and the ambassadors that we just heard from, James Chair and Lee Beck-Soon.
Distinguished guests, ladies and gentlemen, I am delighted to be here for the AKBC and the KABC. I've been in this job for a while, I'm learning the acronyms, and when you get two put together I have to speak them very slowly. But certainly great to be here. This joint meeting on this very important milestone, which is the 40th anniversary of joint meetings between the two councils. Today's meeting comes at a time when our trade and investment relationships continue to thrive, in no small part due to the vital work of the business community that's present here today. Business is at the forefront of our economic relationship. Because of your efforts, Korea is Australia's fourth largest trading partner, our third largest export market, and our 15th largest investor.
The strength and breadth of our relationship is reflected in the companies that are represented here today, covering a broad range of sectors. And they're including mining and energy, agribusiness, manufacturing, financial services, legal and professional services, health and biotech, education, and transport and tourism. Some of these sectors have underpinned our bilateral trading relationship throughout the 40 years since this meeting was first held while other sectors have grown in importance in more recent times, reflecting the much broader extent of our trade and investment links.
Ladies and gentlemen, the long and successful history of these meetings clearly demonstrates the highly complementary nature of our economic partnership.
Australia has been a vital source of minerals, energy and agricultural products that supported Korea's emergence as an industrial powerhouse in the '70s, '80s, and '90s. In turn, Australia had become a major market for Korean manufactured goods, with brands such as LG, Samsung, Hyundai and Kia now household names in Australia. The strength in our relationship was enhanced by the Korea-Australia Free Trade Agreement, which entered into force in 2014. This agreement – which celebrates its fifth anniversary next month – continues to bring benefits to Australian and Korean exporters and investors, drawing on economic growth and prosperity in both countries and stimulating an expansion of our trade relationship into new products and services.
It's a high-quality agreement reflected by the fact that the take-up rate of tariff preferences by our companies is over 93 per cent. We have seen particularly strong growth in Australian exports of a number of products where tariffs have been reduced and eliminated or under KAFTA. Some examples of these include liquefied natural gas, up 50 per cent to $5.7 billion in 2018; sheep meat up 29 per cent to $149.3 million; beef up 25 per cent to $1.4 billion; bottled wine up 34 per cent to $18 million; and beauty and skincare products up 18 per cent to $36 million. And as someone who represents half of New South Wales – 400,000 square kilometres – that produces a lot of the product that goes to Korea, those figures are certainly very important to me and the people that I've met in the Australian Parliament. And the Australian-Korean governments are building on the strong foundation that KAFTA has provided with the agreement by leaders last week to finalise the Regional Comprehensive Economic Partnership. This agreement between 10 ASEAN countries – Australia, China, Japan, Korea, and New Zealand – will provide a range of real benefits for companies that are doing business in our region.
I just want to say on a personal note, someone who I think was involved in four or five of the negotiation rounds last year for RCEP, Korea played a very solid role as a foundation member of RCEP. And like the ambassador said, I think the potential for this agreement is enormous not only for our two countries but this whole Asia-Pacific region as well. So in addition to improved market access, the RCEP agreement includes new scope for trade in services across the region; improved mechanisms for tackling non-tariff barriers; a common set of rules on intellectual property; rules of origin that will strengthen regional production chains and rules on e-commerce to make it easier for businesses to trade online and greater investment certainty for business.
Our goal is to finalise the detail of the agreement early in 2020 and having it signed and entered into force as soon as possible thereafter. Given the framework provided by KAFTA and RCEP, there's significant room for more growth in our bilateral relationship, particularly in direct investment. I'd like to highlight five sectors in particular that we see as a priority. KAFTA has been a genuine game changer in Korea's competitive food and beverage sector. It has not only improved Australia's market access but has also added a strong incentive for Korean investment in agriculture and food production. Australia is well positioned to provide high quality, safe and reliable food supply, not just for the Korean market but also to meet the growing demand from our ASEAN neighbours. I'm pleased to see investments by Hanwha Group and Lotte in farming and feedlot operations and it was mentioned by the ambassador a little earlier.
Australia's health and medical research is ranked among the top worldwide and we offer an efficient and high quality clinical trial ecosystem. Korea is the ideal partner to help accelerate the translation and commercialisation of Australia's medical discoveries and stimulate the growth of this important industry. Australia offers investment opportunities ranging from early stage discovery and translational research to product development partnerships. Recent investments by Korean pharma and health supplements companies such as PharmAbcine and Nutribiotech demonstrate the potential of this sector.
Australia has abundant critical minerals; a world-class resource sector and a strongly supportive Government. As such, we are reliable and secure as an international supplier which is especially important in the current geopolitical context, given the financial growth forecasts for battery minerals. Australia is the perfect partner to help Korea, the home of some of the world's largest battery manufacturers, to foster technological competitiveness in energy markets such as lithium for batteries, high purity nickel and cathode minerals, and I'm also pleased to say that my electorate has an abundance of these minerals with lithium and cobalt in the Condobolin area to the rare earths that are found in abundance near Dubbo. So I'm looking forward to the development of those markets as well.
There are significant opportunities for trade and investment in innovative hydrogen technology. As the ROK implements its hydrogen economy road map, Australia is well positioned as a potential hydrogen supplier due to our extensive energy resources and our own national hydrogen strategy to be released soon. We've also seen recent Korean investment in renewable energy projects and in major transport infrastructure projects.
Ladies and gentlemen, these are just some of the areas that offer significant potential as we look to expand and strengthen our already close and mutually beneficial economic partnership.
Today's meeting is an excellent opportunity for you to explore these areas and others in more depth. I am sure the meeting will facilitate new partnerships and identify new areas for cooperation. I wish you all a very successful and productive meeting. I look forward to hearing of the outcomes from your discussions. Thank you very much.
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