Australia Korea Business Council - PowerPoint Presentation

Slide1

Australia Korea Business Council36th Joint Meeting

Andrew Bragg

Director of Policy & Global Markets

Financial Services Council

2 October 2015 Slide2

From the sheep’s back…Early 1900s: Economy - Agricultural production 61%, manufacturing 21% and mining 18%

Wheat and wool made up more than 2/3 of Australia’s exports

In 1901, 14% of Australians were employed in agriculture

Australia’s largest trading partners were the UK and USA

The Australian Wheat Board

In 1915 the Commonwealth Government set up a wheat pooling scheme to assist wheat growers and to ensure appropriate management of this vital foodstuff during World War I. It was administered by an Australian Wheat Board. The first AWB ceased operations in 1921.

The second Australian Wheat Board was established in the 1930s as a government agency to regulate the wheat market following the Great Depression. It held a monopoly on wheat exporting for the next 60 years.

Australian Wool Bodies:

State and regional based associations of auction buyers date back to the 1890s, with the first national representative body established in 1946.

The national body took the name of Australian Council of Wool Exporters in 1986.Slide3

To the services economy 2015:70% of GDP in services 80% of Australian jobs

Just 17% of exports are in services – which include for example:

Tourism

Education

Business services including accounting and legal services

Transport

Financial services

1.5% of total exports are in financial services Slide4

Tariffs? What are tariffs?

Source: CFMEU

Twitter handleSlide5

KAFTA and financial services

Commitment

KAFTA

Non discrimination against Australian providers

Yes. Accord foreign investment by financial institutions and investors, and some insurance and banking services, equal treatment to domestic investment and services.

MFN. More favourable treatment subsequently given to a non-party, must be accorded to financial investment and services between parties of the FTA.

Market access (investment)

Yes. General prohibition on controls that limit access to the market by foreign financial institutions and investors (restrictions on the number, type or value of services and investment).

Rights for offices and affiliates to perform certain functions in the foreign market (eg: data processing)

Market access (trade in services)

Yes. Certain insurance and banking services can be provided without the need to establish a commercial presence in the foreign market.

Portfolio management services and investment advice for investment funds can be provided in the other party, subject to some limitations.Slide6

An FTA is just the end of the beginning Implementation or bust!

Tariffs and bounties are not the primary barrier to services access

Market access for services relies on regulatory access, abolition of beyond the boarder barriers and cultural change

Implementation is therefore based on intangible legal arrangements

In financial services under KAFTA, this will involve the Korean and Australian securities regulators agreeing or creating:

A framework for mutual recognition

Issuing class order relief

Creating a regulatory guide for financial services licensees Slide7

Next steps in implementing KAFTA Services implementation must be on the agenda for KAFTA financial services committee meetingsASIC and its Korean counterpart must be engaged in this process

New ideas

to improve services implementation

:

There should be periodic reporting to Parliament on implementation to maximise accountability on the government and DFAT

This reporting could be questioned as part of Senate Estimates processes

ASIC could also publish details of FTA implementation of FTA implementation commitments in its annual report Slide8

THANK YOU

abragg@fsc.org.au