AUSTRALIA on Friday signed a significant free-trade agreement with the UK. The Australian government said it would make Australian exports to the UK cheaper and further strengthen the relationship between the two countries.

A joint statement from Prime Minister Scott Morrison and trade minister Dan Tehan said, “This is the most comprehensive and ambitious free trade agreement that Australia has concluded, other than with New Zealand. It demonstrates our countries’ commitment to free trade as a driver of economic growth and stronger bilateral relationships”.

Some of the main features of the Australia-UK FTA include:

  • Immediate elimination of tariffs on more than 99% of Australian goods exports to the UK, valued at around $9.2 billion, when the agreement enters into force.
  • Improved access for Australian farmers to more than 65 million UK consumers who value safe, sustainably produced foods and beverages with the strong provenance Australia offers.
  • Around $43 million in annual customs duties will be removed from Australian wine when the agreement enters into force.
  • For beef, a tariff-free quota of 35,000 tonnes at entry into force will expand to 110,000 tonnes in year 10. Tariffs on beef will be eliminated after ten years.
  • For sheep meat, a tariff-free quota of 25,000 tonnes at entry into force will expand to 75,000 in year 10. Tariffs on sheep meat will be eliminated after ten years.
  • For sugar, a tariff-free quota of 80,000 tonnes at entry into force will expand to 220,000 tonnes in year 8. Sugar tariffs will be eliminated after eight years.

Professionals will have the same access to the UK’s lucrative jobs market as their European competitors, except from the Republic of Ireland. This means Australian job seekers can compete on an equal footing with EU nationals in the UK for the first time in more than 40 years.

Australian households and businesses will save around $200 million a year as tariffs on British imports into Australia, such as cars, whisky, confectionery, biscuits and cosmetics, are phased out within five years, with tariffs on almost all UK goods being eliminated on entry into force.

Young people will have more time to travel to the UK for a working holiday and will be able to stay longer, with eligibility to participate in working holiday opportunities raised from 30 to 35 years of age, and stays allowed for up to three years in each country.

Australian businesses will have the guaranteed right to bid for a greater variety of UK government contracts in a procurement market worth an estimated half-a-trillion dollars annually.

UK businesses will be encouraged to invest in Australia thanks to best practice investment rules, including to set up regional headquarters in Australia to leverage our network of free trade agreements.

Minister for Trade, Tourism and Investment Dan Tehan signed the agreement on behalf of Australia during a virtual ceremony with the UK Secretary of State for International Trade Anne-Marie Trevelyan in Adelaide Friday (17 December).

The Morrison government said it would now work to bring the agreement into force in 2022 so Australian exporters, farmers, workers, businesses and consumers can access the benefits of this gold standard agreement as soon as possible.

When the Australia-UK FTA enters into force, around 75% of Australia’s two-way trade will be covered by free-trade agreements, representing preferential access to 2.9 billion customers.

Minister for agriculture David Littleproud said the deal was a huge achievement for Australian agriculture and the country’s farmers.

“The UK is a high-value market and the reduced trade barriers will provide more opportunity for Australia to export premium products and provide UK consumers with increased choice,” he said.

“There will be immediate new market diversification opportunities and reduced trade costs for many sectors, including wine, seafood, rice and horticulture. New commercially significant up-front quotas for beef, sheep meat, sugar and dairy will also provide immediate benefits for our farming communities.”

 Mr Littleproud also said the new FTA establishes closer co-operation on biosecurity, animal welfare and antimicrobial resistance that will not impact Australia’s standards or right to regulate in these critical areas.

“The FTA will also facilitate agricultural labour mobility between the UK and Australia providing new opportunities to support the exchange of skilled labour,” he said.

Australian Chamber of Commerce and Industry chief executive Andrew McKellar welcomed the opportunities the Australia-UK deal provides.

“The longstanding relationship between Australia and the United Kingdom is taken to new heights by this agreement that will greatly strengthen the ties with a key economic ally. Australian businesses are set to reap the advantages of increased access to the UK market, and its 65 million consumers,” Mr McKellar said.

“As Australia and the world begins to reopen, establishing open and free trade partnerships will play a pivotal role in driving our economic recovery.  It is vital that this agreement is ratified as soon as possible so that Australian businesses can begin to enjoy increased market access.”