Australia–United Kingdom Free Trade Agreement

Did You Know?

• In 2020, trade between the countries was valued at £13.9 billion; Australia accounts for 0.4% of British exports and 1.3% of imports.
• Polling by YouGov from 7–8 September 2016 found that Australia was the country Leave voters most wanted to sign a free trade agreement with, at 47%.
• The Lowy Institute praised the agreement, with commentator Dmitry Grozoubinski writing that it was hard to overstate the achievement of the Australian negotiating team.

Negotiations

The United Kingdom and Australia began negotiations on 17 June 2020. The Australian Government released its negotiating position on 15 June 2020, and the UK Government released its negotiation objectives two days later. The British government sought a 15-year cap on tariff-free imports. Polling by Opinium Research found 61% of Britons prioritised protecting British farmers over signing new trade agreements. A year after negotiations began, the agreement was reached over dinner between Boris Johnson and Scott Morrison; the British government announced an agreement in principle the following day.

Agreement

Under the deal, Australia gained a sevenfold increase in tariff-free beef and lamb exports to the UK, with the full access phased in over ten years. In exchange, Britons under 35 can now get working holiday visas valid for three years instead of two, and Australian employers no longer have to prove economic need when hiring them. Analysts viewed the agreement as an indication that the UK government would prioritise consumer interests over farmers in future trade pacts with countries that have large agricultural sectors. By mid-2022, as ratification neared, the deal drew sharp criticism in Britain. The National Farmers' Union feared Australian exporters could flood the market and lower prices, and pointed to the absence of protections for regional foods like Cornish clotted cream. The Pesticide Action Network objected that Australian produce did not have to meet stricter British standards. Supporters of the deal countered that former environment secretary George Eustice could have blocked it while in office but did not, and that Australia was unlikely to use the full quotas, as it already failed to meet existing ones and found it more profitable to sell to closer Asian markets. The UK government also insisted it had preserved food-safety rules, with Australia agreeing to comply with its high sanitary and phytosanitary standards.

Significance

On 15 June 2021, Liz Truss said the agreement 'paved the way' for the United Kingdom to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The UK had formally applied to join the CPTPP in February 2021 and began membership negotiations on 2 June 2021. British government estimates suggested the agreement would grow the British economy by £500 million over 15 years, equivalent to a 0.02% increase in GDP. The Australian National Farmers' Federation welcomed the deal as an opportunity for increased agricultural exports to the UK. On 11 May 2022, the UK Government introduced a Trade Bill to ratify the UK-Australia and UK-New Zealand Free Trade Agreements. The Australian Government expressed confidence the agreement would be ready by year's end. On 17 November 2022, the Australian Government Joint Standing Committee on Treaties recommended the Australian Government implement recommendations on greater consultation and transparency, and supported the agreement, recommending binding treaty action. The treaty passed both Houses of Parliament on 22 November 2022. A-UKFTA entered into force after both countries confirmed in writing that they had completed their domestic requirements.

Criticism in UK

In 2022, as the British government moved toward implementing the deal, agricultural interests criticised it. The UK chapter of the Pesticide Action Network issued a report expressing concern that the agreement might weaken British restrictions on pesticide use by permitting imports of Australian crops grown under laxer standards; Britain permits farmers to use just four organophosphates against the thirty-three allowed in Australia. It feared this could set a precedent for similar concessions in trade deals with the United States, India and Brazil. A June report by the House of Lords's International Agreements Committee accepted the deal but expressed concern that the government's haste might have come at the expense of negotiating leverage. The committee noted the agreement failed to protect geographically-indicated British foods such as Cornish clotted cream and Scotch whisky, and raised concerns about pesticide use and food grown on deforested land, chastising the government for insufficient consultation with devolved parliaments. The following month, the House of Commons' International Trade Committee joined the criticism; its chair, Angus MacNeil, said the treaty would bring minimal economic gain in return for concessions, noting the government's own calculations showed a 0.08% GDP increase. Consumers might benefit only in small ways such as slightly lower prices on Australian wine.