Australia and South Korea have signed a new free trade agreement - the Korea-Australia Free Trade Agreement (KAFTA). Is it a fair trade fairytale? Or is it a dirty deal done dirt cheap? Or somewhere in between? It is hard to tell, given the initial secrecy of the negotiations, and the complexity of the texts of the agreement There has been much debate in Parliament over the transparency of the trade agreement; the scope of market access provided under the deal; the impact of the investment chapter, with its investor-state dispute settlement clause; the intellectual property chapter; the environment chapter; its impact upon public health; and the labor rights chapter. KAFTA provides an indication of the approach of the new Conservative Government in Australia to other trade deals – such as the Trans-Pacific Partnership.

Recommendation 1 The Korea-Australia Free Trade Agreement 2014 highlights the need for a reformation of Australia’s international treaty-making system. In particular, there should be greater transparency in respect of trade agreements; independent economic analysis; and better oversight by the Australian Parliament.

Recommendation 2 There has been much debate about whether the Korea-Australia Free Trade Agreement 2014 is a comprehensive free trade agreement, or a much limited trade deal in respect of market access.

Recommendation 3 The investment chapter of the Korea-Australia Free Trade Agreement 2014 should be rejected. The investor-state dispute settlement mechanism in the agreement poses significant risks in respect of government regulation – particularly in respect of health, the environment, labor rights, and public interest regulation. The investor-state dispute settlement mechanism exposes the Australian Government to significant liabilities through arbitration tribunal disputes.

Recommendation 4 The intellectual property chapter of the Korea-Australia Free Trade Agreement 2014 is controversial. The proposed regime is one-sided and unbalanced. The intellectual property chapter is focused upon providing longer and stronger intellectual property rights for intellectual property owners. There is a failure to properly consider other public interest objectives – such as access to knowledge, the progress of science and the useful arts, and the promotion of innovation and competition.

Recommendation 5 The environment chapter of the Korea-Australia Free Trade Agreement 2014 is weak. Investment clauses could undermine and undercut public regulation in respect of the environment, biodiversity, and climate change.

Recommendation 6 Investment clauses in the Korea-Australia Free Trade Agreement 2014 could be used and abused by Big Tobacco. The World Health Organization and tobacco control advocates have warned that Big Tobacco has sought to use investment clauses to challenge tobacco control measures, such as graphic health warnings and plain packaging of tobacco products, and frustrate the implementation of the World Health Organization Framework Convention on Tobacco Control.

Recommendation 7 Investor-state dispute settlement raises significant problems in respect of industrial relations, workers’ rights, and trade unions.

Recommendation 8 There is a need to consider the interaction between the Korea-Australia Free Trade Agreement 2014 and other deals under negotiation such as the Trans-Pacific Partnership.