UK and Australia agree post-Brexit free trade deal

A trade deal between the UK and Australia has been agreed, with the Prime Minister saying it marks a “new dawn” in the relationship between the two countries.

Downing Street says the final agreement will be published “in the coming days” but it will end tariffs on UK goods going to Australia.

Farmers in Scotland have voiced concern over the prospect of a deal, saying it could see cheaper imports coming to the country that are produced at lower standards.

The UK Government say they will protect farmers with a 15-year cap on tariff-free imports.

Taxes on Scottish Whisky, which at the moment can be as high as 5% will come to an end under the agreement.

Trade between the two countries was around £14bn last year.

The agreement was finalised between Johnson and his Australian counterpart Scott Morrison over dinner on Monday night.

Johnson said: “Our new free-trade agreement opens fantastic opportunities for British businesses and consumers, as well as young people wanting the chance to work and live on the other side of the world.

“This is global Britain at its best – looking outwards and striking deals that deepen our alliances and help ensure every part of the country builds back better from the pandemic.”

The trade deal is also seen as a path to joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a group of 11 countries in the Indo-Pacific region.

Downing Street said Britons under the age of 35 will be able to travel and work in Australia more freely – suggesting the farm work requirement on working holiday visas could be scrapped.

In the lead-up to the deal being agreed, a split in the Cabinet appeared between International Trade Secretary Liz Truss and Environment Secretary George Eustice, who has concerns about the impact on farmers.

Cabinet office minister Michael Gove also harbours fears that the agreement could fuel demands for Scottish and Welsh independence.

President of NFU Scotland, Martin Kennedy said they have “deep concerns” still about the agreement.

He added: “Under the proposed deal, there is to be a cap on tariff-free imports from Australia for 15 years.

“That is merely a slow journey to the Australians getting unfettered access to UK markets and with no guarantees that the promises of other safeguards will address the fact that very different production systems are permitted in Australia compared to here in the UK.

“An FTA with Australia, and the way it has been agreed without proper industry consultation or scrutiny, sets a dangerous precedent for other Free Trade Agreements, including those with other major farming and food producing nations such as New Zealand, Canada, Mexico and the United States.”

Chief executive of the Scotch Whisky Association Karen Betts said: “It’s very good to see the removal of the 5% tariff on Scotch Whisky in the Agreement in Principle between the UK and Australia.

“This will help Scotch Whisky distillers continue to expand exports to Australia, which have almost doubled over the last decade, making Australia our eight largest market by value.

“It’s also important to us that trade with Australia is now tariff-free for Scotch Whisky – our preference is always for tariff-free trade, which enables Scotch Whisky to compete on a level playing field and on the strength of our reputation for quality.

“We await further details of the Agreement in Principle. A framework for addressing regulatory barriers to trade with Australia, to ensure greater legal protection and tax fairness for Scotch Whisky, is also important to us, and – if delivered in this agreement – will be a real boost for the industry”