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Viewing cable 09CANBERRA470, AUSTRALIA OPTIMISTIC ENTERING KOREAN FTA TALKS

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Reference ID Created Released Classification Origin
09CANBERRA470 2009-05-18 04:07 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Canberra
R 180407Z MAY 09
FM AMEMBASSY CANBERRA
TO SECSTATE WASHDC 1506
INFO AMEMBASSY SEOUL 
AMEMBASSY TOKYO 
AMEMBASSY BEIJING 
AMEMBASSY WELLINGTON 
AMEMBASSY JAKARTA 
AMEMBASSY SINGAPORE 
AMCONSUL MELBOURNE 
AMCONSUL PERTH 
AMCONSUL SYDNEY
C O N F I D E N T I A L CANBERRA 000470 
 
 
NOFORN 
 
STATE PLEASE PASS USTR/WEISEL, BISBEE 
 
E.O. 12958: DECL: 05/18/2019 
TAGS: ETRD AS KS
SUBJECT: AUSTRALIA OPTIMISTIC ENTERING KOREAN FTA TALKS 
 
Classified By: Acting econcouns W Albright, 1.4 b and d 
 
1. (C) Summary:  Australia's lead negotiator is optimistic 
going into the first round of talks for an FTA with Korea. 
She expects agriculture and services to be the toughest areas 
to resolve.  No deadlines, but DFAT has an internal goal of 
concluding this before the expected dates for Australia's 
next election, i.e. by about September 2010.  End summary. 
 
STARTING WITH OPTIMISM 
 
2. (C/NF) Jan Adams, former climate change negotiator and now 
the new head of the China, Japan, and Korea FTA Task Forces 
at the Department of Foreign Affairs and Trade (DFAT), told 
econoff that she is "excited and optimistic" going into the 
first round of formal talks in Melbourne this week on an 
Australia-Korea FTA.  She said she didn't think that the ROKG 
hope that this could be concluded in 12 months was quite 
achievable.  Without setting deadlines, Adams said the 
unofficial target for the GOA was to finish talks before the 
next general election in Australia, which most observers 
expect to take place around September-November 2010.  Adams' 
optimism is based on Korea's track record.  The Koreans have 
concluded several FTAs, and as Adams said have a demonstrated 
ability to negotiate, agree to, and ratify trade deals. 
Importantly, Korea has been able to decide on and make 
concessions and to build an overall package - unlike Japan or 
China, who Adams said are "not in that mental space" yet, 
especially on agriculture.  Adams noted the Koreans were slow 
to join the FTA game, and were now trying to catch up.  They 
are "very organized, serious, and optimistic" that a deal can 
be concluded quickly.  In the end, Adams expected Australia 
and Korea will be able to conclude a real, commercially 
meaningful deal relatively quickly. 
 
3.  (C) But Adams is realistic.  She expects negotiations to 
be tough, and the Koreans to be well prepared.  She 
recognizes that their domestic politics will be difficult on 
the issues that Australia will pursue.  On agriculture, 
Australia will want openings on beef, raw sugar, wheat, 
processed dairy, wine (Adams noted there are some in Korea 
trying to promote and protect a nascent domestic wine 
industry) and rice, although Australia is not currently 
exporting rice due to drought.  The first round this week 
will begin with discussion of some easier areas - for 
example, discussing text for some chapters.  Adams noted that 
both Australia and Korea have agreed to FTAs with the US and 
Singapore, which gives them some common starting ground, 
although they will not necessarily stick to this in their 
agreement. 
 
WHAT THEY WANT 
 
4.  (C) In addition to agriculture, Australian industry wants 
the GOA to push hard for better access in financial services, 
education (Korea is the third largest source for foreign 
students in Australia), and services more broadly.  Although 
Australian manufacturing exports to Korea are limited, the 
GOA wants progress on processed foods and autos (GM 
subsidiary Holden exports some cars to Korea, largely 
intra-GM trade to Hyundai).  Adams was not sure how 
government procurement would go (Australia is not party to 
the WTO government procurement agreement), and was not sure 
whether intellectual property would be a problem. 
 
5.  (C) Per Adams, the Koreans wanted to include industrial 
tariffs, even though Australia's MFN tariffs are already very 
low.  She believes the Koreans will seek something on the 
administration of Australia's anti-dumping laws.  Energy, 
resource, and food security are going to be a big topic.  The 
Koreans are trying to assess how an FTA can help assure 
access to such products from Australia.  The Japanese sought 
something similar in their early rounds of talks; the GOA has 
stuck to the line that all are welcome to buy Australian 
products at market prices.  However, Adams said they may be 
willing to put in language on cooperation if this would make 
it easier for the Koreans to sell the FTA to their domestic 
audience.  Although they have not raised it yet, Adams said 
she believes the Koreans may want a deal similar to that the 
US received raising thresholds for investment that require 
Australia governmental review. 
 
6.  (C/NF) Comment:  Australia's track record on FTAs is 
strong.  Like the US, an FTA signed by Australia can be 
expected to be a "real" FTA, covering substantially all 
trade.  Australia's insistence on this is part of the reason 
for the significant delays in their FTA talks with China and 
Japan, both stalled although Australia cannot for political 
reasons abandon them.  Australia's business community is 
positive about a Korea FTA.  Korea is Australia's fourth 
largest export market (exports in FY2007-08 were A$16 
billion/US$12 billion), and Australia's tenth largest source 
of imports (A$6 billion/US$4.5 billion).  As is true for 
Japan and China, Korea is largely a consumer of primary 
products from Australia, and it exports to Australia are 
largely manufactured items.  End comment. 
 
CLUNE