New FTA framed between Australia and the UK

New FTA framed between Australia and the UK
New FTA framed between Australia and the UK

London: A new free trade agreement with the UK is expected to deliver Australian jobs and business opportunities for exporters, bringing both countries closer together in a changing strategic environment.

Prime Ministers Scott Morrison and Boris Johnson have agreed on the broad outlines of an Australia-UK Free Trade Agreement (FTA).

The FTA is the right deal for Australia and the United Kingdom, 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.

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 UK will liberalise Australian imports with 99 per cent of Australian goods, including Australian wine and short and medium grain milled rice, entering the UK duty free when the agreement enters into force.

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 subsequent five years a safeguard will apply on beef imports exceeding a further volume threshold rising in equal instalments to 175,000 tonnes, levying a tariff safeguard duty of 20 per cent for the rest of the calendar year.

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, rising in equal instalments to 75,000 tonnes in year 10. 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 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 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 makers in the UK will get expanded rights and will now be able to stay for three years with an increased cut off age of 35.

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

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

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.

June 15, 2021

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