Australian food and beverage companies are set to benefit from the recent UK free trade agreement (FTA). The deal will remove more than 99 per cent of tariffs on goods being exported to the UK over the next 10 years.
The FTA will cover approximately 75 per cent of trade, opening up preferential access to almost 3 billion customers.
Minister for Trade, Tourism and Investment Dan Tehan signed the agreement on behalf of Australia during a virtual ceremony with the UK Secretary of State for International trade Anne-Marie Trevelyan.
Wine industry:customs duties worth around $43m each year will be cut.
Beef: a transitional duty-free quota of 35,000 tonnes now, rising to 110,000 tonnes in year 10, and eliminated after that.
Sheep meat: transitional duty-free quota of 25,000 tonnes now, rising to 75,000 tonnes in year 10, and eliminated after that.
Sugar: tariffs eliminated after eight years, initial relief on 80,000 tonnes, rising to 220,000 tonnes in year eight.
Dairy: tariffs eliminated over five years with immediate access to duty free transitional quotas for cheese (24,000 tonnes rising to 48,000 tonnes), butter (5,500 tonnes rising to 11,500 tonnes) and other dairy products (20,000 tonnes per annum.
Seafood: most duties eliminated immediately including finfish, and fresh and frozen rock lobster. Remaining tariffs will be eliminated over three years.
Fruit and Vegetables: most tariffs immediately eliminated, including nuts, avocados, cherries, dried fruits, citrus, carrots, and table grapes. Tariffs on apricots, nectarines, peaches, strawberries, asparagus, beans, tomatoes, apples, and pears will be eliminated over three years. Remaining product tariffs will be eliminated over seven years.
Alcohol Beverage Australia CEO Andrew Wilsmore told Food & Drink Business the free trade brings many benefits for drink producers and customers of both countries.
“The FTA is estimated to see $43 million in annual customs duties removed from Australian wine when the agreement enters into force, which will help strengthen Australia’s position in this key export market and go some way in making up for the challenges imposed by China’s recent tariff increases.
“Australia is the eighth biggest market for Scotch whisky exports, so Australian lovers of scotch whisky will also benefit from the five-year phase out of the 5 per cent tariff Australia has on scotch whiskey,” said Wilsmore.
Meat and Livestock Australia (MLA) has welcomed the change, saying it will liberalise the access for Australian beef, sheep, and goat meat.
Australia-UK red meat market access taskforce chair Andrew McDonald said the deal on paper strengthens the two nations’ partnership.
“Australia and the UK have a long history of trade, with the UK being a loyal purchaser of Australian beef and sheep meat, albeit in small volumes.
“Under the Australia-UK FTA, future trade will be more streamlined, removing burdensome costs from the red meat supply chain that ultimately disadvantage British consumers and stifle opportunities for market development,” McDonald said.
MLA believes the FTA opens a path for market diversification and echoes the countries commitment to rules-based open trade.