The UK has secured a trade deal with Australia eliminating tariffs on all UK goods and boosting jobs and businesses across the country, in the first major trade deal negotiated from scratch by the Government since we left the EU.
The main elements of the deal were agreed by Prime Minister Boris Johnson and Australian Prime Minister Scott Morrison at a meeting in Downing Street last night [Monday 14 June]. A final Agreement in Principle will be published in the coming days.
The leaders reaffirmed the enduring partnership between the UK and Australia during their discussion and agreed to work closely together on defence, technology collaboration and tackling climate change – including through a future Clean Tech Partnership.
The new Free Trade Agreement means iconic British products like cars, Scotch whisky, biscuits and ceramics will be cheaper to sell into Australia, boosting UK industries that employ 3.5 million people across the country. The UK-Australia trade relationship was worth £13.9 billion last year and is set to grow under the deal, creating opportunities for businesses and producers in every part of the UK.
British farmers will be protected by a cap on tariff-free imports for 15 years, using tariff rate quotas and other safeguards. We are also supporting agricultural producers to increase their exports overseas, including to new markets in the Indo-Pacific.
Under the agreement, Brits under the age of 35 will be able to travel and work in Australia more freely, opening exciting opportunities for young people.
The free trade deal will eliminate tariffs on Australian favourites like Jacob’s Creek and Hardys wines, swimwear and confectionery, boosting choice for British consumers and saving households up to £34 million a year.
It will provide benefits across the whole of the United Kingdom, including:
- Scotland exported £126m of beverages to Australia in 2020 - this deal will help distillers by removing tariffs of up to 5% on Scotch Whisky.
- More than 450 businesses in Wales exported to Australia last year, and life science companies and chemicals manufacturers are set to benefit in particular.
- 90% of all exports from Northern Ireland to Australia are machinery and manufacturing goods – used extensively in Australia’s mining, quarrying and recycling sectors. Under the new FTA tariffs will be removed and customs procedures will be simplified.
- Car manufacturers in the midlands and north of England will see tariffs of up to 5% cut, boosting demand for their exports.
An FTA with Australia is also a gateway into the fast-growing Indo-Pacific region and will boost our bid to join CPTPP, one of the largest free trade areas in the world, covering £9 trillion of GDP and 11 Pacific nations from Australia to Mexico.
The deal’s ambitious commitments on market access for services professionals, cutting-edge digital provisions and reduced barriers to investment will benefit the UK’s service sector.
The UK exported £5.4 billion worth of services, including £1.4bn of insurance and pension services and £780m of financial services, to Australia in 2020. Red tape and bureaucracy will be torn down for more than 13,000 small and medium sized businesses across the UK who already export goods to Australia, with quicker export times.
Parliament will have the opportunity to scrutinise the agreement in detail once the text is published, along with an impact assessment and explanatory memorandum.
