Dan Tehan to sign historic free-trade agreement with Britain

The free-trade agreement will abolish tariffs on 99 per cent of goods worth ­almost $10bn and save households more than $200m a year.

Dan Tehan says the new deal ‘demonstrates our countries’ commitment to free trade as a driver of economic growth and stronger bilateral relationships’. Picture: Martin Ollman

Australia and the UK will sign a historic free-trade agreement on Friday morning in a deal that will abolish tariffs on 99 per cent of goods worth ­almost $10bn and save households more than $200m a year on British imports.

The deal marks the most comprehensive agreement Australia has struck with a trading partner outside of New Zealand, and the first UK FTA to be signed with any country since it left the EU.

The Australian has confirmed that the FTA will be signed by Australian Trade Minister Dan Tehan and British Secretary for Trade Anne-Marie Trevelyan.

The deal will provide new ­access for agricultural exports into the British market worth hundreds of millions of dollars, increase the age limit from 30 to 35 for a total working visa stay of up to three years in each country, open up the UK jobs market and allow Australian businesses to compete for more British government contracts.

It would also provide a boost to the Australian wine industry, which has suffered under the economic coercion China has sought to impose on Australia with $43m in yearly Customs ­duties lifted from Australian wines entering Britain, which has now overtaken the US as the largest market by volume.

“This is the most comprehensive and ambitious free-trade agreement Australia has concluded other than with New Zealand,” Mr Tehan said. “It demonstrates our countries’ commitment to free trade as a driver of economic growth and stronger bilateral relationships.

“When the Australia-UK FTA enters into force, around 75 per cent of Australia’s two-way trade will be covered by free-trade agreements, representing preferential access to 2.9 billion customers, up from 27 per cent when the Morrison government came to office.”

Mr Tehan said it was the most rapid conclusion to an FTA on record, with the in-principle agreement being signed in June this year by Scott Morrison and British Prime Minister Boris Johnson

Australia was competing with the US to become the first country to sign up the UK to a post-Brexit FTA.

Australia also avoided having climate change penalties written into the deal.

Mr Tehran said the FTA rewrote a “historical wrong” after Australian farmers became collateral damage from the UK’s 1975 decision to enter the European common market.

“The Australia-UK Free-Trade Agreement is an example to the world that embracing free trade is the best way out of the pandemic,” he said.

Mr Tehan said about $725m worth of key farming products, including beef, sheep meat, wine, sugar and dairy, would be eligible for duty free exports to the UK once the agreement came into force.

For Australian beef, this equated to 35,000 tonnes of product duty free immediately, expanding to 110,000 tonnes within a decade after which all tariffs on beef would be scrapped.

A similar deal for sheep meat will deliver tariff-free quotas of 25,000 tonnes, rising to 75,000 in year 10 of the agreement after which tariffs would be lifted altogether.

Writing in the Australian ahead of the Friday morning signing in Adelaide, Mr Tehan said: “This is a true free-trade agreement.

“This deal will see growth in Australian agricultural exports, which will make Australian farm produce more competitive in a market of more than 65 million consumers.

“As we continue to come out of the Covid-19 pandemic, we know that it is free trade that will drive our economic recovery.

“Trade is essential to the ­Australian economy and ­accounts for one in five jobs, boosting our GDP and bringing real benefits for business owners, employees and Australian ­families.

“Economic modelling shows that Australia’s trade liberalis­ation since 1986 has led to real GDP being 5.4 per cent higher in 2016 than it would otherwise have been (with no trade liberalisation).

“For the average Australian family, trade liberalisation is ­estimated to have seen real income being $8448 higher than otherwise.

“Under our government, 75 per cent of Australia’s trading markets are now covered by free-trade agreements, representing preferential access to 3.35 billion customers, up from 26 per cent when we came to ­office.”