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Australia finally seals free trade agreement with UK

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Australia finally seals free trade agreement with UK article image

Australian producers and farmers are the big winners following the signing of a new free trade agreement with the UK.

Under the new Australia-UK Free Trade Agreement (FTA), local growers will receive a significant boost by getting greater access to the lucrative UK market.

Australian consumers will benefit from cheaper products, with all tariffs eliminated within five years. Tariffs on cars, whisky, and the UK's other main exports eliminated immediately.

And professionals will benefit from provisions to support mutual recognition of qualifications and greater certainty for skilled professionals entering the UK labour market.

Prime Minister Scott Morrison described the agreement as the most comprehensive and ambitious agreement Australia has reached to date.

The FTA will deliver more Australian jobs and business opportunities for exporters, bringing both countries closer together in a changing strategic environment, he said.

"This is a foundational partnership for Australia as it is for the UK. Everything else we do stems from that relationship.

"Our cooperation on defence, on strategic issues, on science and research and in dealing with technology challenges to combat climate change, and indeed the economic relationship, our economies are stronger by these agreements.

"The only one which comes into close connection with that is the arrangement we have with New Zealand."

Elimination of key tariffs

Under the new agreement, beef tariffs will be eliminated after 10 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.

In the subsequent five years a safeguard will apply on beef imports exceeding a further volume threshold rising in equal instalments to 170,000 tonnes, levying a tariff safeguard duty of 20 per cent for the rest of the calendar year.

Sheep meat tariffs will also be eliminated after 10 years. During the transition period, Australia will have immediate access to a duty-free quota of 25,000 tonnes, rising in equal instalments to 75,000 tonnes in Year 10.

In the subsequent five years a safeguard will apply on sheep meat imports exceeding a further volume threshold rising in equal instalments to 125,000 tonnes, levying a tariff safeguard duty of 20 per cent for the rest of the calendar year.

Sugar tariffs will be eliminated over eight years. During the transition period, Australia will have immediate access to a duty-free quota of 80,000 tonnes, rising by 20,000 tonnes each year.

Dairy tariffs will be eliminated over five years. During the transition period, Australia will have immediate access to a duty-free quota for cheese of 24,000 tonnes, rising in equal instalments to 48,000 tonnes in year five. Australia will also have immediate access to a duty-free quota for non-cheese dairy of 20,000 tonnes.

What will it mean for UK imports?

The UK will liberalise Australian imports with 99 per cent of Australian goods, including Australian wine and short and medium grain milled rice, entering the UK duty free when the agreement enters into force.

Under the new agreement working Holiday Visa makers in the UK will get expanded rights and will now be able to stay for three years with an increased cut off age of 35.

The bilateral FTA will help pave the way for the UK's accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, Mr Morrison said.

The two countries will now finalise the text and carry out the domestic processes required to enable signature and the subsequent entry into force of the FTA.

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