Barton Deakin Brief: UK-Australia Free Trade Agreement

Date: Jun 2021

Barton Deakin Brief: UK-Australia Free Trade Agreement

16 June 2021

Overview

Australian Prime Minister Scott Morrison and UK Prime Minister Boris Johnson have agreed in-principle to a free trade agreement (FTA) between the two countries.  This is the first freestanding free trade deal that the UK has agreed to since Brexit.  Once the text of the agreement is finalised, each country will undertake its domestic processes to ratify the agreement.

Background

Australia and the UK launched negotiations for an FTA on 17 June 2020.  Following Minister for Trade Dan Tehan’s visit to the UK on 22 and 23 April, the two countries agreed to strive for an agreement by the time of the G7 Summit.  Once the deal passes into law, there will be a 15-year transition period.

Key Sectors

Australian producers and farmers will receive a significant boost by getting greater access to the UK market.

Whisky and Wine

Whisky and wine will be able to enter the UK duty free when the agreement enters into force.

Rice

Short- and medium-grain milled rice will be able to enter the UK duty free when the agreement enters into force.

Beef

Beef tariffs will be eliminated after ten years. During the transition period, Australia will have immediate access to a duty-free quota of 35,000 tonnes, rising in equal instalments to 110,000 tonnes in year 10.  In the five years that follow, a safeguard mechanism will be triggered when imports exceed a volume threshold, rising in equal instalments of 175,000 tonnes.  A tariff safeguard duty of 20 per cent then applies for the rest of the calendar year.

Sheep meat

Sheep meat tariffs will be eliminated after ten years. During the transition period, Australia will have immediate access to a duty-free quota of 25,000 tonnes.  This will increase in equal instalments over ten years and will have increased to 75,000 tonnes. In the subsequent five years a safeguard will apply on sheep meat imports exceeding a further volume threshold rising in equal instalments to 125,000 tonnes, levying a tariff safeguard duty of 20 per cent for the rest of the calendar year.

Sugar

Sugar tariffs will be eliminated over eight years. During the transition period, Australia will have immediate access to a duty-free quota of 80,000 tonnes, rising by 20,000 tonnes each year.

Dairy

Dairy tariffs will be eliminated over five years. During the transition period, Australia will have immediate access to a duty-free quota for cheese of 24,000 tonnes, rising in equal instalments to 48,000 tonnes in year five. Australia will also have immediate access to a duty-free quota for non-cheese dairy of 20,000 tonnes.

Working Holiday Visa Holders

Working Holiday Visa holders in the UK will get expanded rights and will be able to stay for three years with an increased cut off age of 35.

Mutual Recognition of Qualifications

Professionals will benefit from provisions to support mutual recognition of qualifications and greater certainty for skilled professionals entering the UK labour market.

Manufacturing

Tariffs on cars and the UK’s other main exports will be removed immediately.

 

For more information

The Australian Prime Minister’s Media Release

Joint Press Conference

DFAT FTA website

UK Country/Economy Factsheet

 

For more information, contact David Alexander on +61 457 400 524, Grahame Morris on +61 411 222 680, Cheryl Cartwright on +61 419 996 066, or John Fitzgerald on +61 488 111 568.


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