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Aus-UK FTA a boon for local exporters

A landmark free trade agreement with the UK has opened up new opportunities for WA businesses — helping exporters diversify and grow their market share while attracting investment to Australia.

The Australia-UK FTA, signed on December 17, eliminates over 99 per cent of tariffs on goods exports to the UK — valued at around $9.2 billion — and improves access for key commodities including beef, sheep meat, wine, dairy, rice and sugar.

New commitments will also make it easier for Australia’s services companies and professionals to operate in the UK market. Both countries will offer enhanced opportunities to live and work temporarily in each other’s country.

Key benefits of the Australia-UK FTA include:

  • Tariffs on Australian wine, Australia’s largest dutiable export to the UK by value, will be eliminated on entry into force;
  • Beef tariffs will be eliminated after 10 years with immediate access to a duty-free transitional quota of 35,000 tonnes rising to 110,000 tonnes in year 10;
  • Sheep meat tariffs will be eliminated after 10 years, with immediate access to transitional duty-free quota of 25,000 tonnes rising to 75,000 tonnes in year 10;
  • Sugar tariffs will be eliminated over eight years with immediate access to transitional duty-free quotas of 80,000 tonnes rising to 220,000 tonnes in year eight;
  • Tariffs on dairy will be eliminated over five years with immediate access to duty-free transitional quotas for cheese (24,000 tonnes rising to 48,000 tonnes), butter (5500 tonnes rising to 11,500 tonnes) and other dairy products (20,000 tonnes per annum);
  • Tariffs on most seafood exports will be eliminated on entry into force, including all finfish and fresh and frozen rock lobster. The remaining tariffs will be eliminated over three years;
  • Tariffs on most fruits and vegetables will be immediately eliminated, including almonds, macadamia, other nuts, avocados, cherries (excluding sour cherries), dried fruits, citrus fruits, carrots and table grapes. Tariffs on apricots, nectarines, peaches, strawberries, asparagus, beans, tomatoes, apples (excl cider apples) and pears (excluding perry pears) will be eliminated over three years. Remaining product tariffs will be eliminated over seven years.

 

CCIWA’s International Trade and Investment Centre Manager Michael Carter said the Australia-UK FTA was a once-in-a-generation deal for WA producers and consumers.

“The deal contains commercially significant commitments that will strengthen diversification and COVID-19 recovery for both countries,” he said.

“It removes the red tape that slows trade down and contains a range of provisions which will support SME engagement in bilateral trade including requiring both countries to provide easy access to information that will assist SMEs interested in trading, investing, or doing business with the other country.”

Read more: Going global — are you export ready?

Other features of the FTA include:

  • Australians entering the UK as contractual service suppliers and independent professionals will have the same access to work in the UK as European nationals;
  • Australian businesses will have the guaranteed right to bid for a greater variety of UK government contracts;
  • Working holiday opportunities for young workers will be raised from 30 to 35 years of age, and stays allowed for up to three years in each country.
  • A new visa pathway for innovators and early career development will be piloted for UK citizens to come to Australia;
  • The UK has also been invited to participate in the Australian Agriculture Visa, currently under development; and
  • Australian businesses setting up an enterprise in the UK, undertaking meetings, research, training, attending trade fairs and exhibitions will be able to visit for three months in any six-month period. Australian investors establishing a branch in the UK will be eligible for stays for up to one year, while an Innovation and Early Careers Skills Exchange Pilot will be piloted for UK nationals involved in innovation to enter Australia through a workplace exchange.

The Australia-UK FTA is expected to enter into force during 2022, after it passes the required legislative processes in both parliaments.

CCIWA’s International Trade and Investment Centre can help you reduce the time, cost and risk of going global. Contact the team for a free consultation on (08) 9365 7620 or via [email protected].

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