Trade deal ushers savings as unions decry worker rights

Australians are set to benefit from cheaper jewellery and perfumes while farmers will save on taxes under a free-trade deal, but concerns are being raised about working conditions.

Farmers, including beef and sheep producers, will save about $50 million a year on their exports under a free-trade agreement between Australia and the United Arab Emirates, Trade Minister Don Farrell says.

The National Farmers' Federation welcomed the deal, saying it would help boost exports into a market that was heavily reliant on food imports.

Cattle on farmer Cesar Melhem's small hobby farm in Glenburn, Victoria
Cattle and sheep framers will reap benefits from the deal. (Con Chronis/AAP PHOTOS)

Households and businesses will save $40 million a year with tariffs cut on jewellery, perfumes, furniture, copper wire, glass containers and plastic imported from the Middle East.

ACTU president Michele O'Neil called for strong and enforceable labour rights, including repercussions for businesses that confiscate workers' passports to enforce compliance and withhold wages.

"The UAE ranks among the worst countries in the world for workers' rights and would be one of the most repressive countries any Australian government has ever done a bilateral trade agreement," she said.

ACTU President Michele O'Neil
Michele O'Neil says the UAE is one of the worst countries in the world for workers' rights. (Mick Tsikas/AAP PHOTOS)

Senator Farrell called on unions to back the agreement, saying it would benefit Australian workers and businesses.

Emirati tariffs will be cut on 99 per cent of Australian products entering the country, with an estimated saving of $135 million in the first year and $160 million annually once the pact is fully phased in.

Investment from a multitrillion-dollar Emirati investment fund would flow into Australian markets, Senator Farrell said.

He was "absolutely certain" interest in the critical mineral and renewable energy sector would lead to extra investment.

"Where there's been a free-trade agreement with the UAE, the sovereign wealth fund has followed," he told reporters in Canberra on Tuesday.

The Australian Chamber of Commerce and Industry welcomed the agreement, saying the Middle Eastern nation was an important regional hub for trade.

It would help stimulate economic growth and investment, the chamber said.

There is no investor-state settlement dispute mechanism, which allows an investor to bring a claim against one of the states in the agreement.

The pact will be signed in coming weeks but won't become law until it's ratified by both countries.

The two-way goods and services trade with the Emirates was worth $9.3 billion in 2022, putting it as Australia's 19th largest trading partner, according to government figures.

The Queensland Alumina Refinery in Gladstone, Queensland
Australia sent about $1 billion of alumina to the UAE in 2023. (Dave Hunt/AAP PHOTOS)

About 12 per cent of Australia's alumina exports are shipped to the UAE. It was worth about $1 billion in 2023.

The Australian Aluminium Council called for the federal government to support the domestic manufacturing sector to access more trade markets with the metal a critical component of renewable energy technology.

Universities Australia CEO Luke Sheehy also welcomed the free-trade announcement, saying it would help deepen research collaboration.