UK-Australia trade deal: what does it mean?

By Lisa O'Carroll

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


The deal is centred almost entirely on goods, eliminating tariffs on exports to each other’s countries over 15 years. According to Downing Street, it will reduce the cost of Scotch whisky and British cars in Australia and the price of Australian wine to the British consumer.

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. The Australian government requires work-holiday visa visitors to work three months or 88 days of regional specified work in an eligible industry such as farming, fishing, mining or construction. Australian farmers objected to this concession on the grounds it would leave them with a labour shortage but the UK trade secretary, Liz Truss, argued it was unfair as such restrictions did not exist the other way.

The two countries also agreed “to work closely together on defence, technology collaboration and tackling climate change”, although there is no detail apart from an overall agreement on a “future clean tech partnership”.


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. It did not give details. The National Farmers’ Union (NFU) has warned that allowing tariff-free meat coming into the UK from large-scale ranches in Australia would hit small British farmers hard and lead to some going out of business.

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.

The UK is Australia’s largest export market in volume terms, accounting for approximately 36% of total exported wine volume in 2020. Experts say the wine deal will amount to a paltry 7p or 8p a bottle – or 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 is the deal worth?

The value of the deal is expected to increase UK GDP marginally over 15 years, worth an estimated 0.01 to 0.02%. But the deal is emblematic of Brexit opportunities, being the first bespoke deal built from scratch.

The prime minister 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?

Trade experts say the deal is so narrow it does not reveal much about the UK’s trade goals, its negotiating strengths and weaknesses. “It says nothing about the specific UK asks on services or climate change. There is nothing there that seems related to growing UK trade or industrial strategy. Australia wanted this tariff-free access; what did the UK want? Well, it’s not really clear,” said Henig.