Korean FTA a “cows for cars” deal, says AMWU

There have been expressions of concern from automotive manufacturers over the Korea-Australia Free Trade Agreement.

There have been expressions of concern from automotive manufacturers and the AMWU over the Korea-Australia Free Trade Agreement (KAFTA), confirmed yesterday.

The agreement with South Korea, as reported by Manufacturers’ Monthly yesterday afternoon, will see tariffs eliminated for major agricultural exports to Australia’s fourth-biggest trading partner.

The Australian Industry Group noted yesterday that the main winners in the FTA seemed to be those in agriculture, resources and services.

The AMWU has accused the federal government, of putting manufacturing at the lowest possible level of priority.

The union’s national president Andrew Dettmer called it a “cows for cars” deal.

“We get to export beef, and the Koreans import their cars,” he said in comments reported by Fairfax.

“This is a disaster for manufacturing, which has been put [by the Abbott government] as the last priority.”

South Korea is the world’s fifth-biggest producer of vehicles, manufacturing 4.5 million in 2012. In comparison, Australia made 220,000.

“It has a much bigger industry than ours, and their components sector is bigger as a result,” said Richard Relliy, the CEO of the Federation of Automotive Product Manufacturers.

 “Their supply chain would be much larger and therefore much more competitive.”

Reilly said that the terms of the FTA – which trade minister Andrew Robb said yesterday would immediately remove tariffs as high as eight per cent tariff for some auto suppliers – would have to be properly enforced before his group before he would lend his support.

“If it’s not a fair dinkum free trade agreement, we won’t support it,” Reilly said.

Image: http://www.businessinsider.com.au/