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Australia free trade deal with UK denounced by unions as ‘anti-worker’

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Australian unions have denounced the newly signed free trade agreement with the United Kingdom as an “anti-worker” deal, because companies can look overseas for some roles without advertising for local workers first.

Australia will also allow up to 1,000 workers to come from the UK in the first year of a new “skills exchange” trial, with the Morrison government revealing the pledge as both countries signed an FTA.

The agreement, finally released on Friday, confirms Australian wine producers will enjoy the immediate elimination of UK tariffs when the agreement comes into force next year, but Australian beef and lamb exports will be subject to quotas as tariffs are phased out over 10 years.

Both governments have also revealed details of their plans to make it easier for citizens to work in each other’s countries.

Australia and the UK have agreed to allow citizens aged 18 to 35 to remain in each country for up to three years under the working holiday maker and youth mobility schemes – without being required to perform particular types of work during their stay.

Those backpackers will then be allowed to apply for other visas while still in the country – paving the way to stay for longer.

In addition to that deal, the Morrison government has promised to offer up to 1,000 visas to UK citizens in the first year of an “innovation and early careers skills exchange pilot” – rising to 2,000 in the second year.

Visas will be available to UK citizens aged between 21 and 45 years sent to Australia by their employer for a “placement, secondment or intra-corporate transfer” for up to a year.

Visas will also be available to UK citizens – with no age limits – for “highly experienced and skilled citizens” who have proven contributions in areas like research and development, renewable energy, artificial intelligence and medical technology.

The details were spelled out in a letter from the Australian trade minister, Dan Tehan, to his British counterpart, Anne-Marie Trevelyan, dated Thursday. Australia has also invited the UK to access the new Australian agricultural visa.

Installers and servicers of machinery will also be able to enter Australia for up to three months, while executives and businesspeople with “advanced trade, technical or professional skills and experience” can enter for four years.

The agreement says neither country is allowed to “require economic needs tests, including labour market tests, or other procedures of similar effect, as a condition for temporary entry”. These rules apply to both countries.

The Australian Council of Trade Unions said it was “the latest in a long line of Coalition Government trade agreements that waives labour market testing, meaning that businesses don’t have to advertise the position to local workers before they can bring in migrant workers”.

“Whilst the removal of the highly exploitative requirement for UK backpackers to do 88 days specified work is welcome, it is concerning that the government has caved to the Nationals and will introduce the ‘anything goes’ Ag Visa,” the ACTU assistant secretary, Liam O’Brien, said.

“This is just replacing one group exploited workers with another.”

The full text of the FTA was finally released on Friday, six months after Scott Morrison and Boris Johnson trumpeted an in-principle agreement in June.

One of the most sensitive issues for the UK side was Australia’s push for much greater market access for agricultural exporters.

Tehan – who signed the agreement in a virtual ceremony in Adelaide – said Australian exporters would “benefit from immediate elimination of tariffs on over 99% of Australian goods exports to the UK, valued at around $9.2bn, when the agreement enters into force”.

He said it was “the most comprehensive and ambitious free trade agreement that Australia has concluded, other than with New Zealand”.

Tehan hoped the deal would take effect next year.

But the UK will not eliminate tariffs on Australian beef and lamb immediately: instead those exports will be duty-free only below set quotas in the first 10 years.

The tariff-free quota for Australian beef will begin at 35,000 tonnes in the first year, expanding to 110,000 tonnes by the 10th year. The annual sheep meat quota will increase from 25,000 tonnes to 75,000 tonnes over the same period.

A similar phase-in arrangement applies for Australian dairy (five years) and sugar (eight years).

The Australian agriculture minister, David Littleproud, said these up-front quotas were “commercially significant” and would therefore “provide immediate benefits for our farming communities”.

The Australian wine sector – which has been hit hard by tariffs imposed by China – will gain from an immediate elimination of UK duties, which the Australian government estimates will save the sector about $43m a year.

Australian grape and wine producers welcomed the deal.

“The agreement eliminates tariffs on wine on entry into force, levelling the playing field for Australia’s wine exports with our major competitors from Continental Europe,” Tony Battaglene, the chief executive of Australian Grape & Wine, said.

Australian wheat and barley exports will see UK tariffs phased out over four years, amid efforts to diversify markets amid trade actions taken by Beijing.

In the meantime, the UK will offer Australian wheat exporters a duty-free quota of 80,000 tonnes per year and barley exporters a duty-free quota of 7,000 tonnes per year.

The Australian Labor party’s trade spokesperson, Madeleine King, said the government had “failed to consult adequately with the business community, union movement or civil society” on the impact of the proposed FTA.

The Australian government says there is no investor-state dispute mechanism in the agreement, “reflecting the confidence we share in each other’s legal systems”.

Such mechanisms have been controversial in past FTAs, amid fears that major companies could sue Australia over policy changes in the public interest.

Australia is estimated to have spent about $24m successfully defending itself in tobacco giant Philip Morris’ challenge to plain packaging laws under a Hong Kong investment treaty.

The environment chapter commits both the UK and Australia to “address climate change” including under the Paris agreement.

But in line with previous reports that Australia had persuaded the UK to water down climate language, the agreement does not include a specific commitment to the temperature goals in the Paris agreement.

“The Parties emphasise that efforts to address climate change require collective and urgent action, and acknowledge the role of global trade and investment in these efforts,” the agreement says.

The UK is Australia’s eighth largest two-way trading partner worth almost $27bn in 2018.