Flying under the radar however were the local elections in June across South Korea which gave President Moon’s Minjoo party a landslide victory over the conservative opposition. Whether everyone’s wish for a unified and denuclearised Korea is realistic or not, after a long period of political instability under the previous President, Moon’s policy of appeasement with the North, and a shoring up of his support base, augurs well for a period of consolidation and continued economic growth in the South.
For Victoria, South Korea is a particularly important market for our agribusiness, education and tourism exports. Less well known is the fact that Korea is also a growing market for our beauty and personal care products.
In 2017 South Korea’s beauty and personal care industry was estimated to be valued at approximately USD12.6 billion. (Source: Beauty and Personal Care in South Korea, Euromonitor International, May 2018). Koreans are not only huge consumers of personal care and beauty products, they are interested in products perceived to be natural, including organics, and those originating from countries with a clean and green reputation, such as Australia.
South Korea has a rapidly growing e-commerce market with online purchases from foreign retail sites reaching USD1.6 billion in 2016. (Source: E-Commerce in Korea, Austrade, August 2017). This comes as no surprise given South Korea has some of the world’s fastest internet connection speeds and very high levels of mobile adoption, internet and social media usage. E-commerce is creating opportunities for Victorian companies that manufacture beauty products and in 2017, perfumery and cosmetics represented Victoria’s ninth largest merchandise exports to South Korea. (Source: Australian Bureau of Statistics)
South Korea is also well known for its leadership in Information and Communications Technology (ICT) products, particularly semiconductors, displays, mobile devices and computers. As the country moves forward, South Korea is also looking to build capabilities in the Internet of Things (IoT), artificial and augmented reality (AR/VR), big data management, 3D printing and cloud computing, creating opportunities for Victorian companies with innovative products and ideas.
Other technology related focus areas for South Korea, with potential opportunities for trade or collaborations with Victoria, include digital health, cyber security and fintech.
Autumn 2018 Update
On 8 March the Comprehensive Progressive Agreement for Trans Pacific Partnership (TPP-11) was signed in Santiago by the governments of Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The TPP-11 will enter into force once the signatories have notified completion of their domestic legal procedures.
The election result gives Prime Minister Abe a fresh mandate to continue the government’s bold monetary, fiscal and structural changes which have helped break the deflationary cycle in Japan and created six
The TPP-11 is good news for Victorian exporters to Japan, building on some of the existing terms under the Japan Australia Economic Partnership Agreement (JAEPA). While the US is yet to sign on and has no bilateral trade agreement with Japan, this agreement continues to give Australia a competitive advantage over one of Japan’s other key trading partners.
Food exporters, in particular, are expected to benefit under TPP-11. Accelerated reduction of tariffs on beef, a reduction in tariffs on pork cuts, increased quotas for wheat and barley, elimination of tariffs on certain cheese products and tariff reductions and new quota allocations for others, an extended period for lower "out of season" tariffs on oranges, and elimination of tariffs on fruit juices within 10 years, are just some of the benefits to Victorian exporters.
Victorian government continues to support food exporters to Japan through a number of initiatives including the recent Trade Mission to Foodex (Japan’s largest trade fair for the food and beverage industry), support for Meat and Livestock Australia’s programs promoting grass fed beef and lamb, and promotion of horticultural products through the ‘Taste of Australia’ program.
Companies looking for more information on taking advantage of free trade agreements should note that Austrade is offering a program of free seminars. Find out more information about the seminars by visiting our "What's on" section of the website.
Information on tariffs and useful information on market size can be found at DFAT’s FTA portal.
Summer 2018 Update
On 22 October, the Japanese went to the polls and delivered a resounding victory for Prime Minister Abe and his ruling LDP/Komeito coalition. Following the election, Prime Minister Abe was quick to reaffirm it was business as usual which is good news for Victoria for a number reasons.
The election result gives Prime Minister Abe a fresh mandate to continue the government’s bold monetary, fiscal and structural changes which have helped break the deflationary cycle in Japan and created six quarters of growth. Prime Minister Abe is also expected to continue promoting his strong international agenda which includes supporting trade liberalisation, promoting global skills development, increasing defence cooperation, building tourism, hosting major sporting events, and creating opportunities for increased collaboration on research and development.
Victorian exporters should benefit from the current government’s international policy agenda through:
- Reduced trade barriers under the Japan Australia Economic Partnership Agreement (JAEPA). Japan, along with the other remaining signatories to the Trans Pacific Partnership is also a key supporter of the revised agreement, TPP11, which would further reduce trade barriers for our exporters to both Japan and the other nine signatory countries should it proceed;
- Increased student numbers through Japan’s study abroad programs and increased opportunities for institution to institution partnerships as Japan prioritises global literacy as a key to economic growth;
- Continued demand for quality food and beverage to meet the needs of Japan’s growing tourism sector, particularly in the lead up to the Olympic Games in 2020;
- Growing opportunities for research and development collaboration with Japan;
- Deregulation which is driving increased interest in investment in offshore funds.