Australia has signed a landmark free trade agreement (FTA) with the United Kingdom that will make Australian exports to the UK cheaper, create new opportunities for workers, young people and businesses.
The FTA will support the growth of investment in each country, including in minerals exploration, production, processing and the technologies to support advanced manufacturing.
Tania Constable, Chief Executive Officer at the Minerals Council of Australia said this is particularly important to develop the solutions to the challenges presented by the transition to net zero emissions, while meeting the economic and social expectations of society.
“The FTA will secure the global supply chains and investment that underpin the partnership between the two nations and the economic development of our region.
“It will also support the technology-led productivity growth that has lifted the incomes and improved the living standards of millions of people.”
Ms Constable said coupled with rising urbanisation and the transition to net-zero emissions this will “drive demand for the range of commodities needed in the technologies and industries of the UK and our partners across the world”.
The UK is Australia’s fifth-largest merchandise trading partner, with two-way goods trade worth $21.9 billion in 2020.
The UK is also the third-largest source of foreign direct investment in Australia, valued at $123 billion in 2020, and the second-largest source of foreign investment in terms of total stocks.
When the Australia-UK FTA enters into force in 2022, around 75 per cent of Australia’s two-way trade will be covered by free trade agreements, representing preferential access to 2.9 billion customers.
The Australia-UK FTA will mean:
- Exporters will benefit from immediate elimination of tariffs on over 99 per cent of Australian goods exports to the UK, valued at around $9.2 billion, when the agreement enters into force.
- Farmers will have improved access to more than 65 million UK consumers who value safe, sustainably produced foods and beverages with the strong provenance Australia offers.
- Professionals will have the same access to the UK’s lucrative jobs market as their European competitors, except from the Republic of Ireland. This means Australian job seekers can compete on an equal footing with EU nationals in the UK for the first time in more than 40 years.
- Australian households and businesses will save around $200 million a year as tariffs on British imports into Australia, such as cars, whisky, confectionery, biscuits and cosmetics, are phased out within five years, with tariffs on almost all UK goods being eliminated on entry into force.
- Young people will have more time to travel to the UK for a working holiday and will be able to stay longer, with eligibility to participate in working holiday opportunities raised from 30 to 35 years of age, and stays allowed for up to three years in each country.
- Australian businesses will have the guaranteed right to bid for a greater variety of UK government contracts in a procurement market worth an estimated half-a-trillion dollars annually.
- UK businesses will be encouraged to invest in Australia thanks to best practice investment rules, including to set up regional headquarters in Australia to leverage our network of free trade agreements.