Agreeing on a free trade deal with South Korea, Australia is set to eliminate the competitive edge American beef exports have had in the East Asian nation since a similar U.S. agreement came into effect in March last year.
The deal will help South Korean firms in sectors such as steel and textiles to boost their presence in Australia, and will remove tariffs on key Australian exports such as agricultural products and energy, reports the BBC.
South Korea is one of the biggest importers of Australian beef, but since tariffs were scrapped for American products in 2012, U.S. beef has been comparatively cheaper.
“The differential between Australia and the U.S. stands at about 5%,” said Matt Linnegar, CEO of the Australian National Farmers Federation. “But it would have been 8% next year without the deal, so we would have been at an increasing disadvantage.”
The free trade agreement will have to be approved by the two countries’ cabinets before coming into effect.