The long-awaited Australia-United Kingdom Free Trade Agreement (A-UKFTA) has officially come into force, heralding a new era of economic cooperation and prosperity for both nations.
The United Kingdom, already a significant trading partner, solidifies its position through a robust bilateral trade relationship with Australia. In 2022, the two nations engaged in a staggering $10 billion worth of two-way goods trade, with services trade surpassing $11 billion in the 2021-2022 period. As a result, the UK now ranks as Australia’s second-largest services trading partner.
Under the A-UKFTA, Australian exporters have cause for celebration, as more than 99 per cent of their products gain entry into the UK duty-free. This encompasses a wide range of key exports, including wine, rice, sugar, honey, nuts, olive oil, and food supplements. Additionally, Australian industrial goods such as auto parts, electrical equipment, and fashion items can now access the UK market without tariffs, creating new avenues for market expansion. Moreover, agricultural products like beef, sheep meat, sugar, and dairy will benefit from duty-free transitional quotas, paving the way for the complete elimination of tariffs.
The Minister for Trade and Tourism emphasizes that implementing this trade agreement is significant in the Australian Government’s pursuit of trade diversification. By strengthening ties with a crucial and longstanding trading partner, the agreement opens doors to deeper trade and investment collaboration.
One notable benefit of this deal is the elimination of tariffs on UK-made goods, addressing a pressing concern for Australians. This move aligns with the government’s commitment to tackle rising living costs and enhance affordability for consumers nationwide. Removing these barriers will grant Australian households greater access to high-quality UK products.
Australian consumers will also reap substantial advantages from the A-UKFTA. Already, tariffs on 98 per cent of UK imports to Australia have been eliminated, with the remaining tariffs scheduled for removal within six years. This translates to increased affordability and broader access to a wide array of high-quality goods from the UK.
Beyond trade benefits, the A-UKFTA strengthens the bond between the people of Australia and the UK. Australian professionals now enjoy equal access to the UK job market, akin to their European Union counterparts (excluding the Republic of Ireland). This new dynamic fosters collaboration, career growth, and knowledge exchange. Furthermore, measures have been implemented to enhance mobility for skilled workers and young individuals in both directions. Starting from January 31, 2024, Australians up to age 35 can apply for extended working holidays in the UK, extending their stay from two to three years.
Recognising the value of cultural exchange, the trade agreement prioritises the rights of Australian artists, including those from First Nations communities. It ensures that these artists receive royalties when their original artworks are resold in the UK, providing a fair and empowering system that supports their creative endeavours.
The A-UKFTA goes beyond trade and serves as a catalyst for increased two-way investment. The UK already stands as Australia’s second-largest source of investment, with over $1 trillion recorded in 2022. With modern investment provisions in place, the agreement facilitates further growth in this realm, creating an enabling environment for expanded investment opportunities and economic prosperity for both nations.
Importantly, the A-UKFTA upholds Australia’s sovereign right to develop and implement legitimate policy measures in crucial areas such as public health and the environment. Notably, it excludes an investor-state dispute settlement mechanism, ensuring Australia’s autonomy in shaping policies aligned with national interests.
The swift implementation of the A-UKFTA demonstrates the Albanese Labor Government’s commitment to supporting businesses in diversifying their trade and reducing the cost of living for Australians. To assist Australian businesses seeking to enter or expand into the UK market, Austrade stands ready to provide necessary support and guidance.