Under the final agreement, the ADIC understands that market access outcomes for Australian dairy into the UK will include the eventual removal of all tariffs and importantly the establishment of interim quotas for dairy products, such as cheese, to facilitate immediate commercial opportunities.
The UK is a large dairy importer as well as exporter of dairy products.
According to UK customs data, they imported over 1.3 million tonnes of dairy products in 2019, making the UK the second largest importer of dairy in the world.
More than 99 per cent of their dairy imports are currently supplied by European Union member countries.
Prior to 1973 when the UK entered the European Union, the UK was the Australian dairy industry’s largest export market with around 55,000 tonnes of dairy being shipped there each year.
Since that time however, Australian dairy has been severely disadvantaged due to being subjected to high tariffs across all products entering the UK market – when compared with European dairy products entering the UK at zero tariffs. Australian dairy exports entering the UK have been almost negligible in recent years.
“Concluding this FTA will now mean that Australian dairy manufacturers will be in a position to actively explore market opportunities that they would previously have never considered possible,” ADIC deputy chair, Grant Crothers said.
“While the Australian dairy industry has no expectations of a return to levels of trade seen prior to the UK entering the European Union, what is envisioned are the emergence of high value, niche opportunities, leveraging our counter seasonal supply to the Northern Hemisphere.”
Terry Richardson, Chair of ADIC, congratulated Trade Minister Dan Tehan and the Australian negotiating team for achieving substantial progress towards a Free Trade Agreement with the UK in a relatively short period of time.
“The Australian dairy industry remains the world’s fourth largest exporter and has a proud record of servicing the international market with high quality dairy products,” Mr Richardson said.
“Attaining access into new and existing markets is vital for our industry to continue to be successful.”
The Australian dairy industry’s focus will now be on arrangements at the border for Australian dairy products entering the UK.
This will be an important area for clarification as new opportunities emerge for dairy exports under the final FTA agreement.