13th September 2022What you need to know about the UK-Australia Free Trade Agreement

In December 2021, the UK and Australia signed a Free Trade Agreement. The first ‘new’ trade deal signed since Brexit has been badged as world-class by the Government. But what is in the agreement and is it as good as they say?

Movement of Goods

One of the key components of this trade deal is that it removes the majority of tariffs on trade between the UK and Australia. There have been concerns of the impact this will have on certain sensitive UK industries, and this has been dealt with through ‘staged liberalisation’ via implementing tariff quotas and safeguards, particularly for beef and sheep meat. In particular:

• For beef, a tariff-free quota of 35,000 tonnes at entry into force will expand to 110,000 tonnes in year 10. Tariffs on beef will be eliminated after ten years.
• For sheep meat, a tariff-free quota of 25,000 tonnes at entry into force will expand to 75,000 in year 10. Tariffs on sheep meat will be eliminated after ten years.
• For sugar, a tariff-free quota of 80,000 tonnes at entry into force will expand to 220,000 tonnes in year 8. Sugar tariffs will be eliminated after eight years.

One of the key concerns with these agricultural products, is that generally these are subject to lower standards in Australia than is legally required in the UK. This could have a negative impact on British farmers, and could have a negative environmental impact, encouraging deforestation in Australia to obtain more land that can be used for ranching/grain production.

Interaction with Northern Ireland Protocol

The Northern Ireland Protocol means that trading arrangements differ between the UK and Northern Ireland.

Under this agreement, exports from Northern Ireland to Australia will benefit in the same way as exports coming from the UK. However, where goods are entering Northern Ireland, tariffs may not be reduced or eliminated in the same way as the rest of the UK.

Rules of Origin

In order to obtain the 0% tariff, the produce must originate in the UK or Australia. This is based on a minimum percentage of product components which originate in the relevant country, or alternatively a certain amount of processing being undertaken.

Mobility Agreement

As part of the agreement, there will be mutual recognition of professional qualifications for a range of services with the aim of creating and encouraging opportunities for more professional services. Companies providing a service in Australia are now easily able to send British staff to Australia without being subject to Australia’s occupation list.

In addition, businesses in Australia do not have to prove that they are unable to find a local to deliver contracts before sponsoring a visa for a UK professional.

In summary, it does seem that the desire to negotiate a trade agreement that the EU does not possess would appear to have taken precedent over making good on promises to the former during the referendum, with Australia as the clear winner.

As ever, if you would like to discuss your specific circumstances please do get in touch.