UK Free Trade Agreement comes into play

The eagerly-anticipated Australia-United Kingdom Free Trade Agreement came into force on May 31, paving the way for almost all Australian exports, including wine, to enter the UK duty-free.

Commenting on the deal earlier this month, Lee McLean, Australian Grape & Wine CEO said the agreement was crucial for Australian wine producers facing inflationary pressures, tariffs, shipping delays, and an imbalance in supply and demand.

“The UK is Australia’s second-largest export market by value at $359 million,” said McLean. “And our largest by volume with 208 million litres of wine exported to the UK to March 2023.”

A measure designed to facilitate two-way trade between the two countries, Don Farrell, The Minister for Trade and Tourism, said the deal will deliver benefits to all Australians, including “key exporters” of wine, rice, sugar, honey, nuts, olive oil and food supplements.

“This agreement creates new opportunities to deepen and expand trade and investment with one of Australia’s most important and longstanding trading partners.

“The deal will help tackle rising living costs in Australia by removing tariffs on UK-made goods,” said Farrell.

“For wine, the agreement will see the elimination of import tariffs on entry into force. This creates a level playing field for Australia’s wine exports with our major competitors from Continental Europe.

We estimate the tariff elimination represents a saving of approximately AUD $50 million per year for the Australian wine sector, although a decline in exports in recent months in line with changing market conditions in the UK may reduce this figure,” said McLean.

McLean also said that Free Trade Agreements are a major contributor to improvements for exporters as they remove barriers that curtail trade.

A statement from the Minister for Trade and Tourism said The Albanese Labor Government had prioritised this legislation in the Parliament to deliver on their commitment to help businesses diversify their trade and help reduce the cost of living for Australians.

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