Australia strikes UAE free trade deal
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The news: Australia has struck a free trade deal with the United Arab Emirates (UAE), the first under the Albanese government, boosting its agriculture exporters and burgeoning critical minerals industry.
The numbers: More than 99% of Australian products will be able to enter the UAE, Australia's 19th biggest trading partner, without tariffs under the agreement.
The government predicts the agreement will boost Australian exports by $678 million annually. Two-way trade between the countries was nearly $10 billion last year, with two-way investment topping $20 billion.
The context: Australian farmers are the main beneficiaries, receiving preferential access to the UAE market which the government said would save premium food and agricultural producers around $50 million each year.
Australia has been negotiating with the Gulf state — which had a sovereign wealth fund totalling more than $2 trillion in 2022 — since late last year. The deal is the first struck between Australia and a Middle Eastern country, and was rubber-stamped on Tuesday after negotiations effectively concluded last week.
Canberra has agreed to cut tariffs on a number of items — including furniture and jewellery — imported from the Middle East.
Labor has made Australia’s critical minerals industry central to its signature Future Made in Australia plan, which it hopes will drive a transition to net zero. The UAE deal reduces tariffs on alumina and includes a “framework which will encourage two-way investment”, including in Australian critical minerals.
A range of non-agricultural products — including iron, gold, diamonds and cosmetics — will also receive duty-free access into the UAE.
Prime Minister Anthony Albanese has taken credit for restoring nearly $20 billion in trade with China, which has progressively lifted a series of tariffs imposed during the Morrison years.
But the UAE deal is the first free trade agreement struck under his leadership.
Labor has been seeking extra markets for Australian agricultural exports, especially since a prospective free trade agreement with the European Union (EU) collapsed in October. Both sides pointed the finger over the stalemate, with agriculture minister Murray Watt accusing the EU of being particularly protectionist on agriculture.
The EU had pushed to protect names with geographical indicators, which would have meant Australian producers were unable to label their products with names like “feta” or “prosecco”.
What they said: “This deal means more for Australia than just numbers. More trade means more higher-paying jobs, more opportunities for our businesses, greater investment to build things here in Australia, and cheaper bills for Australian households,” Trade Minister Don Farrell said in a statement.
The sources: Don Farrell press release, Greenstone Equity Partners
