Six months after the parameters were agreed, Australia has signed the free trade agreement with the United Kingdom; an agreement that has been welcomed by the drinks industry.
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 in Adelaide today.
“This is the most comprehensive and ambitious free trade agreement that Australia has concluded, other than with New Zealand,” Mr Tehan said in a joint 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 FTA will benefit exporters with tariffs on over 99 per cent of Australian goods exports to the UK, valued at around $9.2 billion, including around $43 million in annual customs duties will be removed from Australian wine when the agreement enters into force.
Australian Grape & Wine’s Tony Battaglene said, “Australia is the second largest source of wine imports into the UK by volume. In the 12 months ended September 2021, Australia exported 251 million litres valued at $460 million to the United Kingdom. It is our number one export market by volume and value.
“The agreement eliminates tariffs on wine on entry into force, levelling the playing field for Australia’s wine exports with our major competitors from Continental Europe. It also provides a platform for future dialogue to continue to work together on technical issues to further enhance the trade in wine between the two countries.”
Australian households and businesses will save around $200 million a year as tariffs on British imports into Australia, including whisky, are phased out within five years, with tariffs on almost all UK goods being eliminated on entry.
Alcohol Beverages Australia’s Andrew Wilsmore also welcomed the FTA as an opportunity to 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.
He added: “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.
“The 2030 Vision for the Alcohol Beverages Industry set an ambitious plan to double Australian exports. Reducing trade barriers enhances our ability to direct costly tariffs towards investment in capital and people to help grow the economy.”