Interview with H.E. William Paterson, Ambassador of Australia to the Republic of Korea
Korea is Australia's fourth largest overall trading partner. What commodities form the cornerstone of this relationship?
As Korea industrialised through the 1970s and 1980s, Australia became a major supplier of mineral and energy resources and bulk agricultural items like wheat and raw sugar. The largest items in this trade were iron ore, coking coal and thermal coal, and they remain critical for companies like Posco, Hyundai Steel and Kepco. Posco is in fact Australia’s single largest customer for anything, and is also a strong supporter of the bilateral relationship.
We have built a trusted relationship as a stable, high quality and competitive supplier. More recently, liquefied natural gas (LNG) from Australia is becoming a much bigger part of our trade. We matter to each other: Korean demand underpins Australia’s prosperity and our stable supply powers the Korean economy.
In return, of course, Korea has become a major exporter of autos, electronics, home appliances, machinery and industrial materials to Australia. Korean products are household names and valued for their quality and competitiveness. Korea has also become a big supplier of refined petroleum to Australia.
In 2014, the two countries signed a free trade agreement. What have been some of the effects of this?
The Korea-Australia FTA (KAFTA) came into effect almost a year ago. Many of the big items like iron ore and coal were already tariff-free, but the elimination or reduction in tariffs for most other goods has had a stimulatory impact on our goods trade. It’s still too early for definitive figures, but there has been for Australia an encouraging growth in agricultural trade, and the FKI has released figures showing Korea’s trade with Australia is up over 16 per cent this year, at a critical time when Korean exports overall have declined in the slow global economy.
The FTA is not simply about goods: services and investment are key elements where liberalization has been enabled by the agreement. Korea’s services economy is still underdeveloped, while it constitutes over 70 per cent of Australia’s GDP. Our expertise in financial services, legal services, education, tourism and other professional and vocational services can assist Korea to build its own strong services sector, which is a priority of the Park administration. But Korea will need to undertake further regulatory reform and liberalization if it is to be more attractive to foreign partners. For an economy of Korea’s size and strength, foreign investment is still quite low, denying Korea the multiplier effects, skills and dynamism of having more foreign input into the Korean economy.
You attended an event last year to promote Australian wine in Korea. How successful has this drive to increase Australian wine consumption been?
Under KAFTA, the 15 per cent tariff on Australian wine was eliminated, so we can now compete on a level playing field with other wine-producing countries. Early figures show our wine exports to Korea are up around 30 per cent this year. Wine is still heavily taxed in Korea, however, and I find it costs about three times as much for a bottle in Korea as in Australia.
Australia’s big, rich red wines are a Korean favorite, and work particularly well with Korean food. But it always surprises me that Koreans don’t much drink refreshing, crisp white wines so much, which in my view are ideal in Korea’s hottest months. So there’s lots of scope for growth and diversification in the wine trade – and it’s fun to experiment!
What other Australian food or beverages would like you see introduced into the Korean market? Is there anything you particularly miss from home?
Both Korea and Australia work hard to keep our agriculture disease and pest-free. That’s critical to food safety and quality. But it means products have to undergo rigorous testing before they are approved for import into our markets, and this takes time. So I’ve been encouraged to see over the past year big Australian mangoes, cherries, almonds and even the humble Brussels sprout feature in Korea’s supermarkets. With KAFTA, some other vegetables like potatoes have again become competitive. Australian craft beers are more readily available. We don’t lack for much in Korea, but I still hear foreigners say some western products are hard to find.
On your trips back home, what Korean food products can you see that are readily available and popular in Australia?
Korean cuisine has grown in popularity in Australia in recent years, and Korean restaurants are not hard to find. Australians love all Asian cuisines, and Thai, Vietnamese, Indian, Malaysian and Japanese foods have been an established part of eating in Australia for a long time and are very popular. Korean is a more recent arrival, and kimchi has become quite a feature in Asian fusion dishes.
Korean pears and, most recently, table grapes, are available in season in Australia.
Lastly, as you are aware, Asia Society is a crossroads for Asian leaders and it works behind the scenes to untangle some of the great quandaries on the Asian continent and to foster better global education in the U.S. Given this richness, how would you describe our work into a sentence or two? In other words, how would you encapsulate briefly the main purpose, or distinguishing feature, of the organization?
What the Asia Society has done and is doing in the US, it is also doing in Australia through its ‘Australasia Centre.' While about 25 per cent of Australia’s population is foreign-born, and predominantly from Asia, detailed knowledge and understanding of our near neighbours is sometimes still lacking, and the Asia Society amongst others plays a key role in building this knowledge and experience. Australia is an Asia-Pacific or even Indo-Pacific country (our continent spans these two great oceans), and understanding the rich history, diversity and contemporary challenges of these regions is a big job. It’s also essential, and the Asia Society helps us do it.