Cheers! Scotch whisky set to become tariff-free in Australia under post-Brexit trade deal

·3 min read
Australia is the eighth biggest market for Scotch whisky exports, worth £113 million a year -  Jane Barlow/PA
Australia is the eighth biggest market for Scotch whisky exports, worth £113 million a year - Jane Barlow/PA

Scotch whisky is poised to become tariff-free in Australia under a new bilateral trade deal that ministers say will boost the Union.

It is understood London and Canberra are thrashing out the final details of a free trade agreement that will see the five per cent levy on Scotch exports scrapped.

Australia is the eighth biggest market for Scotch whisky exports – worth £113 million a year – and was the first major export market for Johnnie Walker, the biggest-selling Scotch whisky globally, in the 1860s.

It is thought Liz Truss, the International Trade Secretary, has secured the breakthrough over the levy with her Australian counterpart, Dan Tehan, in a move designed to dampen fears that the bilateral deal could undermine the Union by harming Scottish farmers.

A source close to Ms Truss told The Telegraph: "All the focus has been on farming, but this deal will deliver huge wins for industries like whisky and support jobs across Scotland and the whole Union. Liz and the team are putting the pedal to the metal to get the agreement over the line."

The Scotch Whisky Association said a tariff cut would help boost sales and support distillers across Scotland, highlighting Australia's status as a prime market for premium single malt Scotch.

Lizz Truss and her team are 'putting the pedal to the metal to get the agreement over the line' -  Geoff Pugh
Lizz Truss and her team are 'putting the pedal to the metal to get the agreement over the line' - Geoff Pugh

Ms Truss said on Wednesday: "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. 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."

The development came as one of the world's largest trading blocs gave Britain the green light to start the process of joining.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership boasts 11 members including Australia, Canada, Mexico, Singapore and Vietnam, whose combined economies represent 13.5 per cent of global GDP.

Ms Truss said on Wednesday that she would present her accession plan to Parliament in the coming weeks before beginning negotiations this summer.

The imminent trade deal between the UK and Australia is a crucial stepping stone towards joining the wider Asia-Pacific bloc. Scott Morrison, the Australian prime minister, could sign an agreement in principle as soon as next week, when he arrives in Britain for the G7 summit.

Canberra has long been viewed as the easiest target for a new trade deal with the UK in the post-Brexit era. It is set to be the first significant new agreement Britain has signed that is not simply a rollover of trading terms previously secured as part of European Union membership.

However, the negotiations have sparked a split in the Cabinet in recent weeks over the potential impact of a zero-tariff, zero-quota deal on Australian meat imports on British farmers.

It is understood that the UK is now pushing for a 15-year transition period for scrapping all tariffs in order to give the domestic farming sector time to adjust.

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