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UK-Australia trade deal aims to axe whisky tariff

The UK government is seeking to remove the 5% tariff on Scotch whisky exports to Australia as part of a free trade agreement between the two nations.

Whisky barrels
Australia is the eighth biggest market for Scotch whisky exports

The UK’s Department for International Trade confirmed yesterday (3 June) that it is working to remove the tariff.

As part of ongoing trade talks, the UK’s international trade secretary, Liz Truss, is also pushing for improved legal protection for whisky in Australia.

Truss said: “I am fighting hard to get these tariffs cut and secure a deal that benefits producers in Scotland and helps the whole of the UK.”

Australia is the eighth biggest market for Scotch whisky exports, worth £113 million (US$160m) in 2020.

Karen Betts, chief executive of the Scotch Whisky Association, said the deal will “support free and fair trade”.

She continued: “Over the last 10 years, exports of Scotch whisky to Australia have almost doubled. But they’re subject to a 5% tariff which we’d very much like to see removed, which would help to boost growth in our industry’s eighth largest global market.

“The FTA [free trade agreement] is also an opportunity to strengthen the legal protection of Scotch whisky in Australia, and to improve its enforcement. Stopping those who seek to take advantage of the quality reputation of Scotch whisky with counterfeit Scotch is a priority for us in Australia, as it is in all our export markets.”

The potential agreement is the first in a series of UK trade deals that the government is looking to implement with ‘large and fast-growing consumer markets’ outside of the European Union (EU), which the UK left on 31 January 2020. The deals aim to remove tariffs on British exports, such as whisky.

‘Significant for Scotch’

Truss added: “A UK-Australia trade agreement would be significant for Scotch whisky and the Union. Part of the promise of leaving the EU was striking deals with countries well beyond Europe, opening new opportunities for iconic British goods like Scotch overseas.”

Furthermore, the government said an agreement with Australia would help Scottish businesses enter the wider Asia-Pacific free trade area.

The UK is hoping to become a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade bloc later this year, which slashes tariffs on 95% of goods traded between members.

Members of the CPTPP include Australia, Canada, Japan, New Zealand and Vietnam.

The UK has already agreed more than 50 continuity free trade agreements, which replicate all of the previous deals the UK had as part of the EU.

Earlier this year, we looked at the impact of the new Brexit agreement on the spirits industry.

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