The UK has signed a free trade deal with Australia - billed as the first post-Brexit deal negotiated from scratch and not a ‘roll-over’ of previous EU deals.
The significance of the UK-Australia Free Trade Agreement (FTA) also includes its potential as a gateway to the growing economies of Asia Pacific and as a fillip to the UK’s bid to join the CPTPP trans-Pacific trade partnership – one of the world’s largest free trade blocs.
FTA’s rules of origin
The government estimates the FTA will boost UK trade with Australia by half (53%), stimulating £10.4bn of additional trade while ending tariffs on all UK exports to Australia.
Australia currently accounts for 1.7% of UK exports and 0.7% of imports.
To help exporters on both sides benefit from tariff-free or reduced tariff trade, the FTA’s rules of origin guide has been published here.
This guide explains how much of a product must originate in the UK to qualify for the lower tariff agreed in this deal when exported to Australia – and vice versa.
Long negotiations
The two sides reached an agreement in principle in June, spending months going over the legal text since then. The final deal was signed in a virtual ceremony by international trade secretary Anne-Marie Trevelyan on Thursday (16 December) night.
Trevelyan described the FTA as a "landmark moment in the historic and vital relationship" between the UK and Australia.
Australia’s trade minister Dan Tehan said the FTA was Australia’s second-largest trade contract with another country and is “truly historic with true free-trade. Everyone wins”.
FTA highlights
Services and people movement:
- UK service suppliers (including architects, scientists, researchers, lawyers and accountants) to get access to visas to work in Australia without being subject to Australia’s skilled occupation list. HM Government points out this is more than Australia has ever offered any other country in a free trade agreement
- UK businesses and professionals will have guaranteed certainty of access, helping to make long-term business decisions around the movement of personnel, bidding for and accepting new contracts, and advertising their services in Australia
- UK and Australian firms to get guaranteed access to each other’s government procurement markets
- Visas will also be available to ‘highly experienced and skilled’ UK citizens with proven abilities in areas like research and development, renewable energy, artificial intelligence and medical technology
- Young people (aged 18 to 35) to work and travel in Australia for up to three years at a time, removing previous visa conditions
Goods:
- The deal removes tariffs on UK exports, making it cheaper for Australian importers to sell British products such as cars, Scotch whisky and UK fashion. Australian favourites like Jacob’s Creek and Hardys wines, Tim Tams and surfboards will be more accessible for British consumers, the government said
Investment:
- The FTA establishes clear and transparent rules to ensure fair treatment for UK investors, greater legal certainty to prohibit discriminatory treatment and reduces the risks associated with investment decisions
- Provides UK investors with broader and deeper market access than Australia has ever guaranteed before, making it easier to invest across the economy while restricting limitations on business activity and reducing ‘investor-unfriendly’ performance requirements
‘Better access for UK service exports’
Marco Forgione, director general of the IOE&IT, described the deal as “great news for UK exporters,” singling out the FTA’s provisions relating to service exports.
“The elimination of tariffs on UK exports is welcome,” he said, “but perhaps the best news is in relation to services where swathes of restrictive regulations are being swept away to enable better market access for the UK’s world-leading services sector.
“But what is really important is that companies are able to build on the provisions, to access the preferential arrangements easily. We don’t want to risk replacing one set of costly bureaucracy with another. We need streamlined customs procedures to make the most of this step forward.”
