Prepare for a cheaper weekly shop! What the Australia-UK free trade deal means for Australians
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On December 17, the Free Trade Agreement (FTA) between Australia and the UK was formally signed by Minister for Trade, Tourism and Investment, Dan Tehan, during a virtual ceremony in Adelaide with the UK Secretary of State for International Trade, Anne-Marie Trevelyan.
But, what is it really, and how will Australians benefit from it?
Australia and the UK signed a landmark free trade deal last month. Credit: Reuters: Henry Nicholls.
The landmark free trade agreement has been in negotiations between the two countries for the past six months, initially announced back in June by Prime Ministers Scott Morrison and Boris Johnson.
“This is the most comprehensive and ambitious free trade agreement that Australia has concluded,” said Trade Minister Dan Tehan, in a joint media statement with Prime Minister Scott Morrison.
“It demonstrates our countries’ commitment to free trade as a driver of economic growth and stronger bilateral relationships.”
The deal, which was signed last month, seeks to eliminate tariffs on a vast range of Australian exports, such as lamb, beef, sugar and dairy, (valued at around $9.2 billion) to the UK, entitling local exporters more profit for their produce.
This allows Australian farmers and businesses access to more than 65 million UK consumers who value sustainably-produced goods.
The FTA also includes scrapping over $200 million worth of fees imposed on imported cars, whisky, confectionery, biscuits and cosmetics from the UK.
Meaning, Aussies may expect to pay less for British imports like alcohol, make-up, chocolate and cars.
The Morrison Government is working to bring the agreement into effect in 2022, with many popular British brands ranging from Land Rover, Cadbury, Johnnie Walker, Lush, Digestives biscuits, and many more expected to drop in price.
Along with changes in the prices of British imports, the Australia-UK FTA also gives Aussies the same footing in the UK’s competitive labour market as their European contenders (except those from the Republic of Ireland).
“This means Australian job seekers can compete on an equal footing with EU nationals in the UK for the first time in more than 40 years,” said Mr Tehan.
The working holiday visa was also made more available to young people looking to travel to the UK. From the previous age eligibility of 30 years old, the new deal allows Aussies until 35 years of age to participate in working holiday opportunities.
The maximum stay was also increased from two to three years in each country.
Mr Tehan said the “very comprehensive” agreement covered nearly all Australian businesses with the UK, and was a “win-win” for both countries.
“When the Australia-UK FTA enters into force, around 75 per cent of Australia’s two-way trade will be covered by free trade agreements, representing preferential access to 2.9 billion customers,” said the trade minister.
“It is a true free trade agreement; it covers all areas.”
The deal is the first for the UK since Brexit, and comes at a crucial time as Australia wrestles against rising trade tensions with China.
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