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ZNY CCCCC ZZH
R 180755Z JUN 09
FM AMEMBASSY CANBERRA
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INFO RUEHBJ/AMEMBASSY BEIJING 9500
RUEHUL/AMEMBASSY SEOUL 9822
RUEHKO/AMEMBASSY TOKYO 3574
RUEHWL/AMEMBASSY WELLINGTON 0010
RUEHJA/AMEMBASSY JAKARTA 5462
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RUEHDN/AMCONSUL SYDNEY 4669
RUEHBN/AMCONSUL MELBOURNE 6437
RUEHPT/AMCONSUL PERTH 4701
RHEHNSC/NSC WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 02 CANBERRA 000571 
 
NOFORN 
SIPDIS 
 
STATE PLEASE PASS TO USTR/WEISEL,BISBEE 
STATE PLEASE PASS USDA 
DEPARTMENT FOR E, EEB, EAP, EAP/EP, EAP/ANP, EAP/K 
 
E.O. 12958: DECL: 06/18/2019 
TAGS: ETRD ECON PREL CH KS JP AS
SUBJECT: NEW NEGOTIATOR UPDATES ON FTA TALKS 
 
REF: CANBERRA 470 
 
Classified By: Economic Counselor Edgard Kagan for reasons 1.4 (b/d). 
 
¶1.  (C/NF) SUMMARY: Australia's lead negotiator is optimistic 
about the prospects for rapid progress on an FTA with the ROK 
following the completion of the first round of discussions in 
May.  Agriculture will be the biggest sticking point, but 
each country's agreement with the United States provides a 
good template.  ROK President Lee Myung-bak's March visit has 
galvanized PM Rudd's interest in an FTA, which could probably 
be negotiated in the coming 12 months if political will holds 
up on both sides. Japanese officials are following the 
Australia-ROK FTA discussions closely and appear concerned 
about the longer-term implications of Korea improving its 
ability to compete with higher-end Japanese products in 
developed economies.  Australia's FTA discussions with China 
have made little progress, in part because Beijing believes 
that Canberra wants a deal for the sake of having a deal. 
The Australians recognize that they must work hard to 
convince China that a "low-quality" FTA is not politically 
viable in Australia.  End Summary. 
 
PROGRESS WITH THE REPUBLIC OF KOREA 
 
¶2.  (C/NF) Econcouns and Econ Intern met June 12 with 
Ambassador Jan Adams, newly appointed Head of DFAT's China, 
Korea and Japan FTA task forces.  Adams said that following 
ROK President Lee Myung-bak's March visit, PM Kevin Rudd is 
focused on trade negotiations with the ROK as a key part of a 
broader effort to step up the relationship with Korea.  Scott 
Dewar, Rudd's Foreign Policy Advisor who covers Asian issues, 
told us June 13 that the PM believes that improving relations 
with Korea is a major objective for the coming year.  Trade 
Minister Simon Crean and ROK Trade Minister Kim Jong-hoon 
opened the first round of FTA discussions May 18. Following 
this first round, GOA lead negotiator Jan Adams remains 
optimistic that an agreement could be signed in the next 12 
months (reftel) but foresees tough negotiations in 
agriculture and automobiles. Beef is a major concern for both 
sides but each country,s FTA with the United States could 
provide a basis for negotiation. Australia wants dairy access 
in ROK and will not negotiate on sanitary and phytosanitary 
issues. Adams expects ROK will have high ambitions for auto 
negotiations but realizes auto interest groups are strong and 
could limit market access in Australia. 
 
¶3.  (U) The ROK is Australia's 6th largest two-way trading 
partner and 4th largest export market. Australia exported 
A$18.468 billion (US$14.77) to ROK in 2008 mainly in crude 
petroleum, coal, iron ore and beef. Australia imported 
A$6.439 (US$5.15) billion primarily in passenger motor 
vehicles, telecom equipment, refined petroleum and 
electronics. 
JAPANESE INTEREST 
 
¶4.  (C/NF) Adams said Japan is monitoring the progress of the 
Australia-ROK FTA closely. The Japanese seem concerned that 
FTAs will give Korean exporters a competitive advantage over 
Japanese exporters in Australia and other developed 
economies. Japan is Australia's second largest trading 
Qeconomies. Japan is Australia's second largest trading 
partner. Negotiations for an Australia-Japan FTA started 
April 2007, but are stalled; agriculture remains the major, 
but not only, sticking point. 
 
PROGRESS WITH CHINA 
 
¶5.  (C/NF) Australia's FTA talks with China have made little 
progress since they began in 2005. Adams and other GOA trade 
officials believe Beijing is not eager to make concessions on 
agriculture and services, since they believe the Australians 
want this agreement more than China does. The GOA at all 
levels is trying to convince China that a non-comprehensive 
agreement is politically unacceptable to Australia.  This 
week Trade Minister Simon Crean said that Australia was not 
prepared to move to the next stage of negotiations until 
 
CANBERRA 00000571  002 OF 002 
 
 
there is a "new political signal" from Beijing that it is 
willing to negotiate. 
 
Bio Note 
 
¶6.  (SBU) Jan Adams was previously the Australian Ambassador 
for the Environment (2005-2009) and Head of Trade at the 
Australian Embassy in Washington (1999-2004). She was 
involved in the negotiation of the Australia-U.S. FTA, which 
she says is particularly useful in terms of discussions with 
Korea. 
 
Clune