UK-Australia trade deal: what does it mean?

Boris Johnson has hailed a “historic” trade deal with Australia as a “new dawn” for the two countries, but what is the deal about?

Goods

The deal is centred almost entirely on goods, eliminating tariffs on exports to each other’s countries over 15 years. Overall it could increase UK GDP by an estimated 0.01 to 0.02%.

Will it mean more change in British pockets?

Yes. About 1p a week. The government has said it will save British consumers £34m a year, equating to 52p a person.

Holiday visas

It will also allow Britons under the age of 35 to extend their work holiday visas without having to do back-breaking work on Australian farms or building sites.

Farming

Downing Street says British farmers will be protected by a cap on tariff-free imports for 15 years, using tariff rate quotas and other safeguards.

What about animal welfare and food quality?

The government has categorically denied that hormone-fed beef will be allowed into British supermarkets as a result of the deal. “We are absolutely not compromising our high animal welfare and food safety standards. The government continues to champion the top quality producer British farmers both for domestic consumption and overseas,” he said.

The National Farmers’ Union (NFU), however, is concerned as the government made no mention of safeguards for animal welfare in its press statement on Tuesday. It has raised concerns about UK farmers competing with lower standards on industrial scale ranches in Australia, which can involve up to 50,000 animals.

More than 30 active substances are permitted for use on sugar cane that are illegal in the UK including paraquat, a weedkiller banned by the EU in 2007.

Animal welfare practices allowed in Australia but banned in the UK include “mulesing”, the removal of wool-bearing skin in the buttock area of sheep to prevent infection by flies.

What about use of antibiotics in Australian farms?

Antibiotics are in effect permitted for use as a growth promoter, a practice banned in the UK since 2006. Antibiotic usage levels are 16 times per animal in poultry and triple the amount in pigs.

The overuse of antibiotics in farming is one of the biggest causes of the rapidly growing resistance to the drugs across the world, which threatens to make even the strongest antibiotics ineffective and make routine operations such as hip replacements potentially life-threatening.

Cheap wine and swimwear

“The free trade deal will eliminate tariffs on Australian favourites like Jacob’s Creek and Hardys wines, swimwear and confectionery, boosting choice for British consumers and saving households up to £34m a year,” Downing Street announced.

This amounts to savings of 7p or 8p a bottle – or about 50p a year in savings for those who like an Australian tipple.

“In the days when tariffs on car imports were 25%, reducing them to zero was a big deal, when a tariff is 7p on a bottle of wine and reducing it to zero, it’s not a big deal,” said the trade expert David Henig.

It has also been pointed out that the Jacob’s Creek brand, specified by the government in its press release, is owned by Pernod Ricard, one of France’s biggest alcohol companies.

Australia, synonymous with surf and swimming, is a leading swimwear exporter but its top brands, such as Seafolly, are not well known in the UK.

What does Johnson say?

The PM says it shows “global Britain at its best” and allows the UK to “deepen our alliances and help ensure every part of the country builds back better from the pandemic”.

The real significance, however, is as a potential bridgehead to the bigger Trans-Pacific Partnership, stretching from Singapore to Mexico and worth £9tn in trade.

Does the deal set a precedent for a similar one with the US?

Henig says the deal is so narrow it does not reveal much about the UK’s trade goals, or its negotiating strengths and weaknesses.

Will parliament get a vote?

No. But Brigid Fowler, a senior researcher at the Hansard Society, says there should be a proper 21-day scrutiny in parliament once an independent impact assessment is concluded by the newly established trade and agriculture commission, which includes representatives from the food and farming sector.