Demystifying Korea. Service sector opportunity for Australia under KAFTA

Transcription

1 Demystifying Korea Service sector opportunity for Australia under KAFTA

2 Agenda Overall picture Opportunity Services for Korea KAFTA Challenges

3 Bright Australia-Korea picture overall Overall picture is relatively bright 72% of Australian businesses operating in Korea expect overall outlook next year to be better: AIBS Third largest export market Strong demand for Australian resources Mining coal and iron ore Crude petroleum Agriculture and food beef

4 Opportunity Relatively wealthy consumers with disposable income Higher GDP per capita than Spain, New Zealand, Italy 11 th highest disposable income in the world (PPP): OECD Countries by 2014 GDP per capita (PPP): IMF Disposable incoming in 2012 USD (PPP): OECD

5 Opportunity Rapidly aging Healthcare and pension opportunity Source: CIA World Factbook

6 Opportunity Sluggish domestic growth Opportunity to assist Korean firms going overseas

7 Services for Korea Goods exports rely intensively on service inputs Services account for 16% of gross exports but >40% of value-added exports Cost-effective, quality services vital for Korea s industrial competitiveness Source: OECD

8 Services for Korea Restrictiveness by sector and policy area Source: OECD

9 Services for Korea Restrictiveness by sector and policy area Source: OECD

10 Services for Korea Restrictiveness vs China China Korea Source: OECD

11 Services for Korea Restrictiveness vs Japan Japan Korea Source: OECD

12 Services for Korea Restrictiveness vs Australia Australia Korea Source: OECD

13 KAFTA Leveling the playing field EU-Korea Free Trade Agreement, July 2011 US-Korea Free Trade Agreement (KORUS), March 2012 Australia-Korea Free Trade Agreement (KAFTA), December 2014 Canada-Korea Free Trade Agreement (CKFTA), January 2015

14 KAFTA Legal services Establish representative offices in Korea from Dec-2014 Enter cooperative agreements with Korean law firms by Dec-2016 Establish JV law firms by Dec-2019 Australian lawyers permitted to advise on Australian and public international law as foreign legal consultants

15 KAFTA Financial services Supply specified financial services on cross-border basis, without having to open a full commercial presence For investment funds: investment advice and portfolio mgmt For insurance: related services including risk assessment, actuarial and claims settlement Commitments to allow Australian institutions to transfer data into and out of Korea Enhancing transparency on licensing and regulatory decision-making

16 KAFTA Accountancy services CPAs and CAs can provide accountancy consulting services relating to Australian or international tax or accounting law through Korean offices Can work or invest in Korean tax or accounting corporations by December 2019 Negotiations ongoing to expand this to other Australian accounting qualifications

17 KAFTA Telecommunications services Telecoms providers can own up to 100% of voting shares in facilities-based telecommunications service suppliers, and be licensed to provide public telecommunications services by December 2019 Measures to prevent anti-competitive behaviour also included

18 KAFTA Other services Education services New commitments guaranteeing market access to Korea s adult education sector Environmental services Guaranteed access to Korean market, including waste mgment and water and air treatment Film and television services AV Co-production Annex includes wider distribution Engineering services Guaranteed market access and MRA between engineering bodies

19 Challenges Insufficient regulatory transparency Inconsistent interpretation, sudden changes Underdeveloped corporate governance Economic domination by chaebol/large conglomerates

20 Challenges Source: AIBS

21 Challenges Korea requires a long-term commitment And you have to be seen to be making it Face-time is necessary KAFTA helps Have to be willing to face little-to-no-profit Word of mouth is powerful Single mistake can do irreparable reputational damage Intense competition, foreign and domestic Nationalistic undercurrents

22 Thank you