The Australia-UK free trade agreement promises cheaper imports and expanded working holiday visas – but Aussie farmers will have to wait

Tayfun Salci/Anadolu Agency/Getty Images
  • Australia and the United Kingdom have agreed to the terms of a new free trade deal, the UK’s first since abandoning the European Union.
  • Australian consumers will face cheaper UK products through the elimination of tariffs, while meat exporters will benefit from levies being reduced over the coming years.
  • Working visa protections have been expanded, allowing Australians under 35 to live and work in the UK for up to three years.
  • Visit Business Insider Australia’s homepage for more stories.

Australia and the United Kingdom have formally agreed to the terms of a new free trade deal, promising to eliminate tariffs on meat and luxury goods, while overhauling visa requirements for young Australians and Britons hoping to live and work overseas.

Overnight, UK Prime Minister Boris Johnson said he and Australian Prime Minister Scott Morrison signed off on a “new dawn” for the bilateral relationship, worth an estimated $26.9 billion in 2018.

Under the deal, tariffs on imported British products will be wiped out over the space of five years, with duties on goods like British cars and Scotch whiskey cast off immediately.

In turn, tariffs on nearly all exported Australian goods will also be eliminated, with the UK Government estimating the changes will save local consumers £34 million (AU$62.2 million) each year.

Changes to meat tariffs form the cornerstone of the deal. After heated debate between free trade advocates, who said eliminating tariffs would open new trade opportunities, and British farming unions, who feared liberalisation would see Australian exports undercut local producers, both nations agreed to step down beef tariffs over 15 years.

“During the transition period, 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,” Australian Trade Minister Dan Tehan said in a statement.

Over the next five years, a levy will be placed on beef exports which exceed the 170,000 tonne threshold over a calendar year, Tehan added.

Similar provisions are in place for sheep meat, with tariffs on Australian sugar exports to expire after eight years, and dairy exports to be wound down over five years.

Working visas expanded, with farm work eliminated for UK backpackers

Beyond the elimination of tariffs, the deal also paves the way for easier travel and working arrangements between the two natons.

Australians in the UK under a Working Holiday Visa will be permitted to stay for up to three years, up from two, with the scheme soon opening to those aged 35 and under, expanding the age bracket by five years.

The deal also heralds an expanded recognition of professional qualifications in each country, with Tehan saying the move will make it easier for skilled Australian workers to enter the UK workforce.

The changes also eliminate the requirement for UK backpackers to undertake three months of farm work before exploring Australia over an extended period.

To prevent a forecast shortfall in farm labour, the free trade agreement paves the way for a new agricultural workers visa.

“The new seasonal agricultural worker visa would mirror the existing Seasonal Worker Programme and will add to the pool of workers available to work on Australian farms,” Agriculture Minister David Littleproud said in a statement.

That visa is expected to be implemented by the end of the year, Australia’s international border closure notwithstanding, with the allowance extended to all ten ASEAN nations in the coming months.

“Young people, any people can go and work much more easily in Australia, both ways,” Johnson said on Tuesday outside 10 Downing Street.

“There’ll be free exchange of British rent-a-Poms and indeed Australian campaign managers will be able to come more easily to work in this country.”

New deal “lays the foundation further for the bigger partnership”: Morrison

The deal — which is yet to be voted into law in each nation — could be worth up to £900 million (AU$1.64 billion), industry groups estimate.

It marks the first new free trade agreement the UK has signed since Brexit, and each nation’s leaders have pointed at bigger things to come.

After severing its ties to one of the world’s largest single markets, Johnson positioned the new agreement as a stepping stone to the Trans-Pacific Partnership.

“This is global Britain at its best – looking outwards and striking deals that deepen our alliances and help ensure every part of the country builds back better from the pandemic,” he said.

For its part, Australia prosecuted the deal amid a long-running trade stoush with China, which has mounted levies and tariffs on a number of key exports.

Morrison said the new deal will build new ties with an old ally.

“I said we would wait for the right deal, Boris, and I think we’ve got the right deal between UK and Australia,” Morrison said alongside Johnson.

“And that just lays the foundation further for the bigger partnership we have on everything from defence to climate change and to deal with the many other big global challenges that liberal democracies face together, and always, UK and Australia will face those together.”