Half a century after Britain joined the European common market and effectively ended what had been Australia’s most important long-standing trading partnership, Australian farmers are smiling again following today’s In-Principle Agreement on a new Free Trade Agreement between Prime Ministers Morrison and Johnson.
Winners on the Australian side will be Australia’s beef and sheep, dairy, rice, sugar and wine makers as the deal is set to increase the UK’s tariff-free threshold ensuring a gradual reduction in existing tariffs that will see beef and sheep meat tariffs eliminated after ten years, sugar tariffs over eight and dairy products over five years.
And after a highly challenging 12 months for the wine industry following China’s sudden tariff impost, the Australia wine sector will also have more reason for optimism with the free trade deal eliminating tariffs on Australian wines to the UK.
More broadly, Australian businesses and consumers will also benefit with the Australia government reducing tariffs on a range of imported British goods including whisky, pharmaceuticals, cars, machinery and the freeing up of access both ways for services companies.
Professionals will also benefit from provisions to support mutual recognition of qualifications and greater certainty for skilled professionals entering the UK labour market.
As part of the give and take of negotiations with the UK over the FTA, UK backpackers will no longer be required to fulfil a period of time working in the agriculture sector which was seen as a concession to get the deal over the line. However, the Government is confident this gap will be filled through the establishment of a new stand-alone agriculture visa.
The historic FTA, the first the UK Government has negotiated since its Brexit, continues Australia’s big trade pivot from China. And while the detail is still to be ironed out, attention will quickly turn to finalising Australia’s trade agreement with the European Union while India and Israel, among others, remain other important target markets for new trade agreements and strengthened economic relationships.
The two countries will now finalise the text and carry out the domestic processes required to enable signature and the subsequent entry into force of the FTA.
Australia’s Prime Minister Scott Morrison said in statement “A new free trade agreement with the UK will deliver more Australian jobs and business opportunities for exporters…. greater access for businesses and workers, all of which will drive economic growth and job creation. Australian producers and farmers will receive a significant boost by getting greater access to the UK market.”
The leaders reaffirmed the enduring partnership between the UK and Australia during their discussion and agreed to work closely together on defence, technology collaboration and tackling climate change – including through a future Clean Tech Partnership.
The final word however goes to Prime Minister Boris Johnson who said the deal marked a “new dawn” in the relationship and that “….you give us Tim Tams, we give you Penguins, you give us Vegemite and we give you Marmite. We give you Burberry and Macintoshes, and you give us RM Williams Japaras.”