Thread by @CoppetainPU

What do we know about the “cap on tariff-free imports” into the UK 🇬🇧 from Australia 🇦🇺 under the free trade agreement?

A bit, but not much. Mostly what has been announced in press releases from the two countries.

And incidentally, this thread ⬇️ needs correcting.

1/14

https://twitter.com/CoppetainPU/status/1404773780707233793

It’s an “agreement-in-principle”, done now BEFORE the negotiations are finished, politics wanted something on the sidelines of the G7 Summit.

But there is information on those imports of farm goods. @DmitryOpines has had a go.

https://twitter.com/DmitryOpines/status/1405083759007961089?s=20

2/14

But there’s more, and I need to correct this:

https://twitter.com/CoppetainPU/status/1404773789129396228?s=20

Many of the present tariff quotas are not duty-free, just lower-than normal tariffs within the quota limits.

So note, in many cases Australian imports get an in-quota tariff cut too

3/14

Australia’s press release says the cap on tariff-free imports comes first from a tariff quota ending after 5 or 10 yrs.

But for two products—beef and sheep/goat meat—quantities exceeding the final tariff are charged “safeguard” duty in years 11–15: trademinister.gov.au/minister/dan-t…

4/14

We can compare this with the present tariff quotas for Australia as applied by the UK gov.uk/government/pub…

5/14

1. BEEF

NOW
2021 tariff quota—4,669 tonnes, in-quota duty = 20%

FTA
Year 1—35,000 tonnes, in-quota duty-free
Year 10 of FTA—110,000 tonnes, in-quota duty-free
To Year 15—quota expands to 170,000 tonnes, out-of-quota duty drops to 20%
Year 16—unlimited duty-free

6/14

2. SHEEP/GOAT MEAT
(all in-quota imports are duty-free)

NOW
2021 tariff quota—15,349 tonnes

FTA
Year 1—25,000 tonnes
Year 10 of FTA—75,000 tonnes
To Year 15—quota expands to 125,000 tonnes, out-of-quota duty drops to 20%
Year 16—unlimited duty-free

7/14

3. SUGAR (“raw cane sugar for refining”?)

NOW
2021 tariff quota—4,964 tonnes, in-quota duty variable around £82.01/tonne

FTA
Year 1—80,000 tonnes, in-quota duty-free
Year 8—220,000 tonnes, in-quota duty-free
Year 9—unlimited duty-free

8/14

4. SHORT, MEDIUM GRAIN MILLED RICE

NOW
2021 tariff-quota—273 tonnes, duty-free (any grain)

FTA
Year 1—unlimited duty-free short/medium grain
_______

5. WINE
From tariff to no tariff

9/14

5. DIARY (1)
This is a difficult one to crack. As far as I can see, there are no Australia-only tariff-quotas for dairy imports into the UK—neither in the UK’s WTO commitment, nor in its applied tariff quotas for 2021

Simplest guess, next tweet:

10/14

DAIRY (2)

NOW
🇦🇺 can sell dairy goods to 🇬🇧 via tariff quotas for all non-EU countries. None are duty-free (eg £175.74/tonne)

FTA
• Cheese: new 24,000-t duty-free tariff quota rising to 48,000-t in 5 yrs, then unlimited
• Non-cheese dairy: new 20,000-t tariff quota

11/14

DAIRY (3)

Which cheeses? Australia potentially had UK tariff quotas for cheddar and “cheese for processing” and still has them with the EU27 under WTO commitments

Because there were no imports to the UK in the reference period, 100% of the EU28 quota stayed with the EU27

12/14

DAIRY (4)

Which cheeses (cont)

But Australia has just renegotiated and reduced the EU27 quotas for those cheeses so a matching increase in the UK’s WTO commitment is likely. See: tradebetablog.wordpress.com/technical-note…

13/14

DAIRY (5)

Which non-cheeses? UK dairy tariff quotas also exist for butter and skim milk powder, but not specifically for Australia and not duty-free. We’ll have to see if they are the ones in the Australia deal

14/14

Now confirmed, and still vague eg on dairy, in the agreement in principle

Note: the "safeguard" is not a cap but effectively a tariff quota with a much lower out-of-quota tariff of 20%. For beef that's the same as the present in-quota rate.
gov.uk/government/pub…