Wine, RM Williams set to benefit from Australia-UK trade deal, Downer says

Winemakers will save millions under a new UK trade deal, while an iconic Adelaide-made brand is set to be a big winner.

Winemakers will be some of the big winners from Australia’s looming trade deal with the United Kingdom, as the two countries scramble to finalise the agreement.

Australia’s former High Commissioner to the UK Alexander Downer says fruit growers, dairy exporters and R.M. Williams boots are also tipped to benefit from better access to the British market.

But the deal may not be finalised by the time Scott Morrison and British Prime Minister Boris Johnson meet in London on Tuesday, AEST time, following the G7 world leaders summit this weekend.

Britain's Prime Minister Boris Johnson meets Prime Minister Scott Morrison during an official welcome to the G7 summit in Carbis Bay, Cornwall. Picture: AFP

Trade Minister Dan Tehan on Sunday said there had been “enormous progress” in the past six weeks but Australia and Britain had not yet reached a final agreement.

“My hope is that over the next 48 hours we’ll be able to resolve the outstanding issues but the clock’s ticking and time is running out,” Mr Tehan told ABC’s Insiders program.

“We want to make sure it’s an agreement that’s in Australia’s national interests and if we need to be patient, we will be patient and wait to make sure that we have an agreement of substance in Australia’s national interest.”

Improved visa access for Australians to live and work in the UK is one of the final sticking points, along with the phase-in time to scrap tariffs on Australian beef and sheep meat entering the UK.

Britain has reportedly demanded better labour mobility for its citizens but hasn’t granted similar concessions for Australians.

Mr Downer, who was Australia’s top diplomat in the UK for four years until 2018, said South Australian winemakers would be among the big winners once the deal was signed.

“Wine will be able to go into the UK duty-free,” he said.

“That will make it a little bit more competitive than it currently is, particularly with countries that don’t have similar kinds of agreements with the UK.”

Australian winemakers exporting to Britain forked out almost $50 million in import taxes in 2019 under the previous European Union system which has essentially carried over post-Brexit, according to Wine Australia estimates.

Nearly a third of all Australian wine exports are sold to the UK, but sparkling wine still faces tariffs of £26 per 100 litres while still wine faces tariffs of up to £12/hl.

Former Australian High Commissioner to the United Kingdom Alexander Downer at the National Press Club in Canberra in 2019. Picture: AAP Image/Lukas Coch

The deal would also likely scrap high import taxes for footwear, to the benefit of iconic brands like Adelaide-made R.M. Williams boots, Mr Downer said.

“They’re pretty expensive over in the UK but it’ll be that much cheaper, there will probably bigger demand,” he said.

Agricultural industries, including dairy and fruit exports, would also get better access to the world’s fifth biggest economy.

“There will be counter-seasonal opportunities for … the fruit industries which used to export to the UK before 1973,” Mr Downer said.

“It’ll be much easier for them now.”

Sheep and beef farmers would benefit from a high-end “niche” market, despite a recent campaign by British farmers against zero-tariff access for Australian meat.

Britain is expected to agree to zero-tariff access, but the phase-in period has been one of the biggest sticking points.

“The British government is saying that the phase-in period should be 15 years, and the Australian government is saying that’s unacceptably long,” Mr Downer said.

“The Australian Government will want to get that right, whereas the British public I don’t think care much about that at all.”

The trade deal would be important for Australia both in real terms and as a symbol of its ties with allies at a time when China had targeted wine and other export sectors, Mr Downer said.

“The UK is a particularly important and symbolic country – it is a permanent member of the United Nations Security Council, a nuclear weapons state and the fifth biggest economy in the world,” he said.

“So having this kind of link up with them, where there are already such strong historic ties, will be symbolically very importantly, it will be politically very important.

“It shows the major Western liberal democracies binding together more strongly.”