Australia-UK free trade agreement a mixed bag for Aussie ag

The UK free trade deal will come into effect this month — but is it all good news for agriculture?

The long-awaited United Kingdom-Australia free trade deal will be fast tracked to come into force by May 31 in good news for beef, sheep, dairy, wine and rice producers.

Australian Prime Minister Anthony Albanese said “it is game on”, with the agreement timetable to be formalised with British Prime Minister Rishi Sunak when the pair meet at 10 Downing Street in coming hours.

“That will be a date at which people can pencil in – Australian companies – to really push for greater benefit with more wine, more sheep products, more beef, more seafood, more spices, more products from Australia to be present here,” Mr Albanese said.

The finalisation of the deal had been sitting at the UK end, as Australia signed the FTA in November last year.

It will remove tariffs on 99 per cent of Australian exports, with quotas on other products removed in 10 years – however, the pathway will not be easy for all commodities.

Beef tariffs will be eliminated within a decade under the deal and 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.

Currently, Australian beef into the UK is limited by quota to 3761 tonnes.

And, despite the United Kingdom no longer being part of the European Union, it will still require beef sold into its market to be EU-accredited.

A spokesman for the Department of Agriculture, Fisheries and Forestry said there were 3352 properties in Australia which held EU-accreditation.

Cattle Australia president David Foote said in February that Australia might struggle to fill the additional quota available when the FTA comes into effect.

The deal will also allow UK citizens up to the age of 35 to stay in Australia for three years on a working holiday visa, without the requirement to complete three months’ agricultural work.

That move has prompted concerns from farmers relying on backpackers to supplement their workforces that the current workforce shortages in the industry will be exacerbated.

Prime Minister Anthony Albanese in London, ahead of the coronation of His Majesty King Charles III at Westminster Abbey on Saturday May 6, 2023. Picture: Carlos Jasso/Parsons Media

Mr Albanese said the deal will also help boost agricultural operations that have been hammered by spiralling input costs and lost a major revenue stream after China imposed hard and soft bans on Australian imports in recent years.

“(The FTA) means more jobs in Australia. It also means more economic activity and growth for Australia. When you look at, for example, the wine industry, they have product that’s ready to go to market,” Mr Albanese said.

National Farmers’ Federation chief executive Tony Mahar has previously said the deal will improve access to an important market for Australian farmers by “meaningfully” reducing trade barriers at a time when many countries are stepping back from trade liberalisation.

“Australia has among the lowest agricultural subsidies in the OECD. To survive and thrive, Australian farmers rely on open and fair access to export markets,” he said.

National Farmers' Federation CEO Tony Mahar. Picture: AAP Image/Lukas Coch

With the UK deal in the rear view mirror, Mr Albanese will meet with EU commission president Ursula von der Leyen later on Friday to discuss the Australia-EU FTA.

“We’re continuing to work very hard because we want that (EU FTA) to come into effect as soon as possible as well … Now that this has been finalised, we can really hone in on the European agreement,” he said.

UK-FTA BY THE NUMBERS:

BEEF tariffs will be eliminated after 10 years. Australia will have immediate access to a duty-free quota of 35,000 tonnes during the transition period, rising in equal instalments to 110,000 tonnes by about 2033.

SHEEP meat tariffs will also be eliminated after 10 years. Producers will have an immediate duty-free quota of 25,000 tonnes, rising to 75,000 tonnes in year 10 years.

SUGAR tariffs will be phased-out over eight years. The immediate duty-free quota for Australian sugar will be 80,000 tonnes, increasing by 20,000 tonnes each year.

DAIRY tariffs will be gone by 2028. During the transition period, Australia’s immediate duty-free quota for cheese will be 24,000 tonnes. This will rise in equal instalments to 48,000 tonnes. The immediate duty-free quota for non-cheese dairy will be set at 20,000 tonnes.

SHORT and medium grain milled rice will receive immediate duty free access.