Business envoy July 2021
Inking a world-leading FTA: breakthrough in the Australia-UK Free Trade Agreement negotiations
The mid-June 2021 announcement by Prime Ministers Morrison and Johnson of an agreement in principle on the core elements of a bilateral free trade agreement will guide the negotiations to successful conclusion over the coming months.
The UK was Australia’s fifth-largest goods trading partner in 2020, with two-way goods trade valued at $21.9 billion. Under the Australia-UK Free Trade Agreement (FTA), Australia’s businesses stand to benefit with 99 per cent of exported Australian goods (by value) being able to enter the UK tariff-free after the agreement enters into force. This gives our exporters a key competitive edge boosting opportunity for entry or expansion into the UK market. Tariffs on remaining goods will be liberalised over time. Lower import tariffs on UK products coming into Australia, including cars, confectionery and whisky, may see these products become more affordable for Australian consumers due to downward pressure on prices.
In 2020, the UK was Australia’s third-largest services trading partner, with two-way trade worth $9.9 billion. The FTA will provide better access to the UK Market, opening up still more opportunities for Australian services business and investors to grow and expand. Other commitments will ensure the impartiality, transparency, and responsiveness of UK regulators. As with all agreements, the UK-FTA will include safeguards and carve-outs that will preserve the Government’s ability to regulate in sensitive sectors and provide public services.
The FTA will also include provisions that will open up new e-commerce opportunities across all sectors of the Australian economy, as well as commitments that enable cross-border data flows, appropriate protections for consumers and flexibility for legitimate public policy objectives.
The Australia-UK FTA will provide more opportunities for people to work and live in the UK and Australia. For example, businesses will have more certainty that they can hire people from either country. Younger Australians will have more ways to visit and work in the UK. Australia will remove the sectoral work requirement for UK nationals in our Working Holiday Maker program.
For more information on the negotiations and the anticipated benefits of the free trade agreement, visit: dfat.gov.au/aukfta. Further details associated with Australia-UK Free Trade Agreement will become available after the negotiations conclude.
Elisabeth Bowes, Chief Negotiator