It is now well known that the Department for International Trade (DIT) has negotiated a free trade agreement (FTA) between the United Kingdom and Australia. The FTA was signed “virtually” on 16 December 2021.
It is a deep and comprehensive agreement which aims to enhance the historic trading and investment relationship between the 2 nations and aims to build upon long-lasting economic and cultural links. It is expected to bring long-term economic benefits for both nations, support UK jobs and provide opportunities for growth in sectors all around the UK.
Most importantly, the FTA aims to support the reorientation of the UK’s trading relationships towards the markets in the Indo-Pacific region and represents a major step in the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), one of the world’s largest FTAs.
More specifically, the FTA…
- is the UK’s first trade deal negotiated from scratch since leaving the EU and fulfils the government’s manifesto commitment to secure a free trade agreement with Australia;
- gives UK firms guaranteed access to bid for an additional £10 billion worth of Australian public sector contracts per year;
- for the first time, gives access to visas to work in Australia to UK service providers (including architects, scientists, researchers, lawyers and accountants) without being subject to Australia’s changing skilled occupation list. This is more than Australia has ever offered any other country in a free trade agreement;
- removes tariffs on all UK exports, making it cheaper to sell iconic products like cars, Scotch whisky and UK fashion to Australia, while making Australian favourites like Jacob’s Creek and Hardys wines, Tim Tams and surfboards more accessible for British consumers;
- is the first ever FTA in the world to include a dedicated innovation chapter. This ensures that the agreement will continue to support emerging trade opportunities and innovative technologies throughout its lifetime; and
- as well as removing barriers to trade, the agreement aims to support closer cooperation between the UK and Australia to raise global standards. This will be possible through bilateral cooperation in fora including the World Trade Organization (WTO) and the G20.
The impact of the agreement is potentially phenomenal! Looking at the “numbers”….trade between the UK and Australia was worth £13.9 billion in 2020, having grown steadily between 2010 and 2019. The top UK goods exports to Australia are chemicals and manufacturing, while the top services exports include insurance, pensions, and finance. UK exports to Australia already support over 100,000 jobs in the UK and import demand from Australia is expected to grow by 30% in real terms over the next decade.
Greater access to Australian markets and reduced regulatory burdens on goods and services are therefore expected to bring extensive opportunities for UK businesses and consumers.
More to follow once the FTA has been fully ratified by both Governments.
Kepdowrie Chambers has assisted hundreds of UK-based companies with their “homework” and due diligence into the Australian market, including setting up and expanding their businesses in Australia. In particular, we have noted that expressions of interest in the Australian market have grown steadily ever since the 2016 EU Referendum (and exponentially since Brexit), so please get in touch if you’d like to have a discussion about “Brexporting” to Australia. We’re here to make sure that the learning-curve is not a challenge and you can quickly get on with the more important task of winning new customers.