Australia finalises historic Free Trade Agreement with UK

Jon Condon, 16/06/2021

THE Australian red meat industry has welcomed the announcement in London overnight of agreement in-principle regarding the parameters of the Australia-United Kingdom Free Trade Agreement.

The deal inked by Prime Ministers Scott Morrison and Boris Johnson is the first ‘new’ bilateral agreement to be agreed following the UK’s departure from the European Union, while it represents Australia’s twenty-seventh trade agreement with global trading partners.

The two countries will now finalise the text of the agreement, and carry out the domestic legislative processes required to enable signature and the subsequent entry into force of the FTA.

Once signed and ratified, under the terms announced tonight:

  • Australian beef tariffs will be eliminated after ten years. During the transition period, Australia will have immediate access to a duty-free quota of 35,000t, rising in instalments to 110,000t in year ten. In the subsequent five years a safeguard will apply on beef imports exceeding a further volume threshold rising in equal instalments to 175,000t, levying a tariff safeguard duty of 20pc for the rest of the calendar year. Similar Safeguard or ‘Snapback’ provisions apply in Australia’s trade agreements with the US, Japan and Korea, designed to protect the interests of domestic producers from unusual spikes in imports.
  • Sheep meat tariffs will also be eliminated after ten years. During the transition period, Australia will have immediate access to a duty-free quota of 25,000t, rising in instalments to 75,000t in year ten. In the subsequent five years a safeguard will apply on sheepmeat imports exceeding a further volume threshold rising in equal instalments to 125,000t, levying a tariff safeguard duty of 20pc for the rest of the calendar year.

This outcome not only enhances the long-term partnership between the British meat trade, British consumers and the Australian red meat industry, but also signals a strong commitment by both Governments to the merits of delivering free trade, a joint Australian red meat industry statement said.

“The UK and Australia have a long, shared history, both culturally and commercially,” chair of the Australia-UK Red Meat Market Access Taskforce, Andrew McDonald said.

“For Australian red meat producers, processors and exporters, this has meant working with UK importers and distributers to supply high quality Australian red meat products to meet discerning British customer demand,” he said.

“Back in the 1950s the UK was one of Australia’s steadfast export customers. A lot has changed since then, as red meat markets have evolved and we have responded to strong demand in markets closer to home. Despite this, the UK has remained a loyal purchaser of Australian beef and sheepmeat, albeit in small volumes.”

Long history of beef trade

Under Britain’s Imperial Preference Scheme which operated into the 1950s, the UK was Australia’s dominant export customer. The UK Meat Agreement signed in 1951, saw the UK contracted to purchase all of Australia’s export beef. Under the terms, the UK undertook to provide unrestricted access at guaranteed minimum prices for Australia’s entire exportable surplus of beef, mutton and lamb. The agreement was diluted over time as the post-war UK became less reliant on imports, but in 1955, for example the UK still took an estimated 80pc of our beef exports totalling 195,000t.

The UK pulled out of the deal somewhat abruptly, having joined the European Common Market, in September 1967. Fortunately for the Australian beef industry, the US came along as a replacement, at much the same time.

Trade statistics show Australian exports to the UK for the calendar year to May reached just 272t of beef and 2190t of lamb.

“Australia and the UK have shared values when it comes to the production of high-quality red meat,” Mr McDonald said.

“While our ability to service the market has previously been constrained by a highly restrictive UK (and prior to 2021, European Union) import regime, the A-UK FTA will facilitate an easier response to British consumers seeking to ‘buy Aussie’ – should they wish to do so.

The securing of this phase of the FTA signalled a new chapter in the two countries’ bilateral relations and an opportunity to work collaboratively for years to come, he said.

On behalf of the red meat industry, Mr McDonald thanked Trade Minister Dan Tehan, Secretary of State for International Trade Liz Truss and their respective negotiating teams for the tireless work in achieving the ‘momentous outcome.’

Industry reaction

Other industry representative bodies have praised the outcome of the agreement.

“At a time when processing and the export industry has been grappling with workforce issues, record-high livestock prices, and the COVID pandemic, this is a great opportunity for the Australian red meat industry to further develop and deliver into the future,” the Australian meat Industry Council’s chief executive Patrick Hutchinson said.

“AMIC and its members have been providing advice and consultation throughout this process and have worked hard to achieve this great outcome.”

“We acknowledge and thank Andrew McDonald, Director and Department Manager – Sales, Marketing and Corporate Affairs at NH Foods (AMIC member), for leading our joint taskforce as Chair,” Mr Hutchinson said.

The Cattle Council of Australia welcomed the in principle agreement struck in London overnight.

CCA president Markus Rathsmann said the FTA would see trade between the two nations fully liberalised over the coming decade.

“Trade under this deal will be very different to how it was before the UK joined the EU,” Mr Rathsmann said. “Under the FTA, exports to the UK will be driven by demand in the UK.”

“Australia is a world leader in producing high-quality, healthy and sustainable beef, and this deal will further diversify our export markets. The UK has been a long-term trading partner with Australia and will now be able to enjoy more of our high-quality product,” he said.

“It also signals a strong commitment by both Governments to delivering free trade.”

In last night’s announcement, Australian trade minister Dan Tehan said the FTA with the UK would deliver more Australian jobs and business opportunities for exporters, bringing both countries closer together in a changing strategic environment.

“The FTA is the right deal for Australia and the UK, with greater access to a range of high-quality products made in both countries as well as greater access for businesses and workers, all of which will drive economic growth and job creation in both countries,” Mr Tehan said.

“Australian producers and farmers will receive a significant boost by getting greater access to the UK market. Australian consumers will benefit from cheaper products, with all tariffs eliminated within five years, and tariffs on cars, whisky, and the UK’s other main exports eliminated immediately.

The ambitious bilateral free trade agreement would help pave the way for the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

UK government:

A statement from the UK Government said the agreement meant iconic British products like cars, Scotch whisky, biscuits and ceramics will be cheaper to sell into Australia, boosting UK industries that employ 3.5 million people across the country.

“The UK-Australia trade relationship was worth £13.9 billion last year and is set to grow under the deal, creating opportunities for businesses and producers in every part of the UK,” it said.

British farmers will be protected by a cap on tariff-free imports for 15 years, using tariff rate quotas and other safeguards.

“We are also supporting UK agricultural producers to increase their exports overseas, including to new markets in the Indo-Pacific.

Under the agreement, Brits under the age of 35 will be able to travel and work in Australia more freely, opening exciting opportunities for young people.

UK Prime Minister Boris Johnson said the agreement marked a new dawn in the UK’s relationship with Australia, underpinned by a shared history and common values.

“Our new FTA opens fantastic opportunities for British businesses and consumers, as well as young people wanting the chance to work and live on the other side of the world. This is global Britain at its best – looking outwards and striking deals that deepen our alliances and help ensure every part of the country builds back better from the pandemic.”

UK Secretary of State for International Trade, Liz Truss, said the deal delivered for Britain and showed what the country could achieve as a sovereign trading nation.

“It is a fundamentally liberalising agreement that removes tariffs on all British goods, opens new opportunities for our services providers and tech firms, and makes it easier for our people to travel and work together,” she said.

The agreement paved the way for the UK to join the Trans-Pacific Partnership, a £9 trillion free trade area home to some of the biggest consumer markets of the present and future.

“Membership will create unheralded opportunities for our farmers, makers, innovators and investors to do business in the future of engine room of the global economy,” Ms Truss said.






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  1. James Bowie, 16/06/2021

    Very good start but let’s keep it in perspective as it equates to about one big steak per person in the UK.

  2. Marco, 16/06/2021

    Excellent news. Australia needs to diversify its trading partners and the UK is an ideal partner.

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