We have had the chance to scan the new Australia-United Kingdom Free Trade agreement and – if Trade Minister Damien O’Connor can negotiate similar terms for us – the prospects look hearteningly good for NZ.
Beef and sheep meat tariffs on Australian exports to the UK will be eliminated after 10 years. Sugar tariffs will be removed after eight years, and dairy tariffs after five years.
Short and medium grain milled rice will get immediate duty-free access once the FTA is in place.
During the countdown to tariff-free trade, Australian producers will gain incremental access to the British market. Beef producers gain immediate access to a duty-free quota of 35,000 tonnes (rising to 110,000 tonnes a year in a decade). With sugar exports, producers have immediate access to a duty-free quota of 80,000 tonnes, rising by 20,000 tonnes each year.
Dairy farmers will also have access during the transition period to a duty-free quota for cheese of 24,000 tonnes. This will rise to 48,000 tonnes by year five.
If UK standards prohibit importing hormone-injected meat, then Australia will not send it to the British market. Dan Tehan, Australia’s trade minister, says robust export controls provide the flexibility and assurance to meet a range of importing country requirements, including HGP-free when required. HGP is hormonal growth promotants.
Under the in-principle trade agreement, working holiday-makers in the UK have won expanded rights to stay in Australia for three years up until the age of 35. Australia says there will also be a separate agriculture visa established for UK visa holders.
With the local shortfall of workers, the Australian government has also unveiled a separate agriculture visa targeted at Asean nations, mirroring the seasonal worker program that already exists for the Pacific.
The UK says Australia has agreed to drop requirements that firms hire Australian nationals first. The British government says Australia has agreed to mutual recognition of qualifications (this means lawyers would be able to practice without re-qualifying and vice versa).
Australia has offered the “most substantial level of access Australia has ever granted in a free trade agreement” allowing British companies to bid for government contracts. The UK government says the FTA will create new opportunities for British firms including in transport and financial services.
There is no investor state dispute settlement clause. This might assuage the concerns of free-trade critic Professor Jane Kelsey. An ISDS is a mechanism in a trade deal that gives foreign investors, including Australian investors overseas, rights to access an international tribunal to resolve investment disputes. These clauses have become increasingly controversial in trade agreements.
Northern Ireland exports several machines and manufactured goods used by Australian miners. Those will enter the Australian market tariff-free.
British passenger vehicles, including SUVs, have a 5% tariff when exported to Australia. This will be removed once the agreement comes into force.
The Queensland MP Bob Katter is sceptical, pointing out Australia will not have unfettered access to the UK market for beef, lamb, dairy and sugar for five to 15 years. There will be three changes of government in the UK in that time, so it does not mean two bob, he says.
Australian unions are already criticiising the yet undisclosed provisions covering people movement.