Additional comments of Coalition senators

1.1        The Korea-Australia Free Trade Agreement (KAFTA) represents a positive outcome for Australia. The evidence received from Australian companies and peak business organisations during the inquiry highlighted the benefits that will accrue for the Australian economy. While the reduction in tariffs will place some additional competitive pressure on certain sectors, it will also result in more competitive pricing of items which Australians consume. In particular, KAFTA restores Australia's competitive position as an exporting nation in relation to the United States, Canada and other countries which have reached, or are about to conclude, trade agreements with Korea. Timely ratification of KAFTA will potentially provide two initial tariff reductions, one on ratification and another at 1 January 2015, expanding the opportunities for Australian businesses in this important high-value marketplace.

1.2        Coalition senators do not accept most of the majority report's findings, particularly on the merits of KAFTA for the Australian economy. However, Coalition senators endorse the committee's final recommendation that KAFTA should be implemented without further delay.

1.3        In particular, Coalition senators disagree with two of the majority report's recommendations – the recommendation to initiate discussions with Korea for a side letter to limit the scope of the investor state dispute settlement (ISDS) provisions and the recommendation for the Australian Government not to agree to ISDS provisions in future trade agreements.

Recommendation

1.4        Coalition senators recommend that prompt binding treaty action be taken in relation to the Free Trade Agreement between the Government of Australia and the Government of the Republic of Korea.

Senator Chris Back                                                                        Senator David Fawcett
Deputy Chair

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