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UK-Australia FTA to remove agricultural good tariffs

Argus | 28 March 2023

UK-Australia FTA to remove agricultural good tariffs

By Jessica Clarke

The Australia and UK free trade agreement (A-UKFTA) has received Royal Assent in the UK Parliament, eliminating tariffs on agricultural goods such as beef, wheat and barley.

The UK is Australia’s fifth largest trading partner. Once the A-UKFTA is in force, it will open up new commercial opportunities for Australian businesses through the elimination of tariffs on trade goods and increase trade efficiency. The agreement will remove tariffs on over 99pc of the A$9.2bn ($6.15bn) Australian goods exported to the UK annually, according to the Australian trade ministry.

Beef is Australia’s largest globalagricultural good export, with the country exporting A$9.6bn worth of agricultural goods in 2020. Australia’s beef exports to the UK currently face duties as high as 12pc. The A-UKFTA provides significantly improved market access for Australian beef producers and exporters, including immediate access to a duty-free quota of 35,000t which will rise in equal instalments to 110,000t in 10 years. In the next five years — or 11-15 years after the A-UKFTA is implemented — the duty-free quota will continue rising in equal instalments to 170,000t, with a product-specific safeguard of 20pc applied on beef imports that exceed this volume threshold.

The agreement opens up export opportunities while decreasing export costs for Australian traders, in a time when global beef trade is competitive and unpredictable. Australian beef exports to the UK reached a peak of 10,616t in 2014 and steadily decreased to 773t in 2022, according to the Australian Bureau of Statistics (ABS). As beef production and cattle slaughter rates rise in Australia, creating strong trade relationships is vital to the growth of Australia’s exports.

Australia was the fifth largest global exporter of wheat in 2020, with exports worth A$3.9bn that year. Under the new A-UKFTA, market changes will include a full elimination of tariffs over four years, immediate access to a duty-free quota of 80,000 t/yr for wheat and immediate access to a duty-free quota of 7,000 t/yr for barley. Australian wheat exports into the UK hit a high of 9,341t in 2020 and fell to 5,512t in 2022, according to ABS.

 source: Argus