In a historic moment for Australian trade, the Australia-United Kingdom Free Trade Agreement (A-UK FTA) took effect on 31 May 2023, opening new opportunities for export and import businesses and promoting job creation.
The agreement helps businesses diversify their markets and supply chains, along with grow their market share while attracting investment into WA.
“This agreement crowns a significant period, marking a new high-point of Australia’s trade liberalisation agenda, adding our second-biggest investor, the UK (more than $1 trillion in 2022), to agreements with the European Union and India this year,” says CCIWA CEO Chris Rodwell.
“Western Australia shares strong bonds of tradition, language, family, history, and rich two-way tourism with the UK.
“Free trade means Australian exports and services gain access to bigger markets, enabling growth, innovation and job-creation, while for Australian consumers it means access to better and more affordable products.”
What is included under the agreement?
It removes tariffs on more than 99% of the $9.2 billion Australian goods exported to the UK annually such as beef, sheep meat, wine, honey, dairy, short and long grain rice, nuts, olive oil and manufactured goods.
UK tariffs on Australian industrial goods, such as auto parts, electrical equipment and fashion items are now eliminated. Australian agricultural products, including beef and sheep meat, sugar and dairy products, will have duty-free transitional quotas, with eventual elimination of all tariffs.
It reduces costs and removes red tape that slows trade. Faster timeframes for customs clearance will provide certainty to exporters.
For Australian consumers, tariffs on 98% of UK imports to Australia are now eliminated, with the remainder removed within six years.
Australian professionals also benefit by gaining access to the UK job market on par with EU nationals, with more mobility pathways for workers who wish to work in the UK. This will also make it easier for Australian service companies to do business in the UK.
What impact will the agreement have?
Minister for Trade and Tourism Senator, the Hon Don Farrell MP says the agreement promotes further growth in two-way investment between Australia and the UK.
“This agreement creates new opportunities to deepen and expand trade and investment with one of Australia’s most important and longstanding trading partners,” Senator Farrell says.
“The implementation of this trade agreement delivers on the Australian Government’s trade diversification agenda.”
Local manufacturing will be boosted as export demand from the UK increases from the FTA.
Australian suppliers of all sizes, including SMEs and Indigenous-owned businesses, will have guaranteed right to bid on a wider variety of UK government goods, services and construction contracts, providing new access to a procurement market worth an estimated $500b annually.
UK Minister for International Trade, Nigel Huddlestone says the agreement also supports UK businesses.
“Australia is one of our closest friends and likeminded partners and our trade deal secures favourable terms for British exporters, removing tariffs on all UK goods and slashing red tape,” he says.
Milestone for Australian international trade
CCIWA’s Head of International Trade and Investment Centre (ITIC) Michael Carter says, “looking back through the annuals of time, it was 50 years ago Australia announced the withdrawal of a range of preferences to the United Kingdom and the termination of the UK-Australia Trade Agreement as the UK prepared to join the European Economic Community (EEC) in 1973”.
“This week we bear witness to the A-UK FTA coming into force that will offer a range of bilateral trade and investment opportunities for WA business across a range of sectors including, agribusiness and food, wine, infrastructure, energy and the circular economy and critical minerals.
“This iconic FTA will be a terrific mantle to expanding WA’s bilateral trade currently worth $1.26b and we look forward to working with more WA companies to build on this trade, as well as investment through our dedicated website WA Investments in collaboration with the WA Government’s Invest Trade WA and their European Trade Office.”
This is the most comprehensive and ambitious FTA Australia has ever made, other than with New Zealand.
The agreement is also a milestone for the UK, being its first new trade deal signed since Brexit.
The UK is Australia’s fifth largest trading partner and second largest source of foreign investment.
CCIWA’s International Trade and Investment Centre (ITIC) helps businesses reduce the time, cost and risk of going global. Contact the team for a free consultation on (08) 9365 7620 or via [email protected].