‘Great win’ for farmers as Australia-UK free trade agreement comes into force

Australian farmers will be the big winners under an historic free trade agreement with the UK which comes into force today, Federal Agriculture Minister Murray Watt says. Senator Watt said the “gold-standard agreement”, drafted and signed in 2021, would drive increased trade and economic growth, with tariffs removed on more than 99 per cent of Australia’s $10 billion two-way merchandise trade with the UK. “From today, Australian farmers will enjoy duty-free market access for a range of goods including beef, sheep meat, wine, sugar, dairy, grains, horticulture, and seafood exports,” Senator Watt said on Wednesday. “The agreement is one of the most comprehensive, innovative and ambitious FTAs Australia has signed with any trading partner, and it will provide a foundation for greater profits for Australian producers.” Tarrifs on goods including wine, short and medium grain rice, honey, olive oil and nuts will be eliminated immediately, while duty-free transitional quotas will be established for beef, sheep meat, wheat, barley, sugar, and dairy. In the first year, the FTA will allow Australian producers with EU accreditation to export up to 35,000 tariff-free tonnes of beef into the UK — a huge increase on the less than 4000 tonne quota previously in place. The tariff-free quota will rise in equal annual instalments until it reaches 110,000 tonnes in year 10, followed by the lifting of tariffs altogether when the trade is fully liberalised in 2038. A volume safeguard provision will apply until the end of year 15, after which no safeguards will apply. For Australian sheep producers, the FTA will grant access to a tariff-free quota of 25,000 tonnes of sheep meat in the first year, rising to 75,000 tonnes in 2028, with tariffs eliminated after 10 years. Australia-UK Red Meat Market Access Taskforce chair Andrew McDonald said the FTA marked “a new chapter in Australia-UK trade relations”. “For our sector, (it) provides an important framework to continue to do business with British customers and consumers,” he said. “The FTA provides an opportunity to modernise our trading relationship for the future, and we look forward to more streamlined trade and reduced supply chain costs with the implementation of the agreement.” Australian Grape and Wine chief executive Lee McLean said the UK was Australia’s second largest wine export market by value — worth $359m million — and the largest by volume, with 208 million litres of wine exported to the UK to March 2023. “The elimination of import tariffs under this agreement will see a level playing field for Australia’s wine exports with our major competitors from Continental Europe,” Mr McLean said. The agreement will also allow the resumption of Australian sugar exports to the UK after a fifty-year hiatus. “Entry-into-force of the Free Trade Agreement with the United Kingdom is great news for sugar,” CANEGROWERS chair Owen Menkens said. Senator Watt said the agreement would provide “instant benefits” for Australian farmers. “The FTA creates faster customs clearance times while maintaining our world-leading biosecurity measures, which ensure Australia is protected from harmful diseases, pests, and weeds,” he said. “This is a huge achievement and a great win for Australian agriculture and our farmers.” Australia’s agricultural trade with the UK was worth $868 million in 2021-22, with key exports including wine ($449m), canola seeds ($150m), lamb and mutton ($135m), beef and veal ($15m), chickpeas ($12m), wool ($12m) and cocoa and chocolate ($9m), according to figures from the Federal Department of Agriculture. Total agricultural exports to the UK reached an all-time high in 2021-2022, while Australian agriculture, forestry and fisheries exports to the UK have increased by $225m to $868m since 2019-20.