Australia – United Kingdom Free Trade Agreement takes effect
Commencement 31st May 2023
Finally, the much anticipated Australia – United Kingdom Free Trade Agreement commenced, marking a significant milestone in the UK AUS trade deal.
During his visit to the United Kingdom, Prime Minister Anthony Albanese announced 31 May as the date of entry into force of the A-UKFTA, saying that “This agreement will deliver significant benefits to Australian exporters, consumers, workers, and our economy more broadly. The Australia-UK FTA represents one of the most comprehensive, innovative, and ambitious free trade agreements concluded by Australia to date and strengthens an already close relationship between Australia and the UK.”
Key Benefits: Tariff Eliminations and Savings
With the entry into force of this comprehensive agreement, there will be no tariffs on over 99 per cent of Australian goods exports to the UK and 98 per cent of UK imports to Australia. Savings of approximately $200 million a year will be made as tariffs on imports from the UK are eliminated. After five years, all UK imports will enter Australia duty free.
Economic Impact: Boosting Trade and Supporting Jobs
The UK Australia trade deal will play an important role in levelling up the UK, delivering benefits for towns, cities, and rural areas throughout the country. It is expected to increase trade with Australia by 53%, boost the economy and adding to household wages in the long run. Exports to Australia already support over 100,000 UK jobs and Australian demand for imports is expected to grow by 30% in real terms over the next decade. Greater access to Australian markets and reduced regulatory burdens on goods and services will create opportunities for businesses and consumers across the UK.
Opportunities for UK and Australian Businesses
New commitments and minimised paperwork will ensure manufactured goods exit customs quickly, making exporting to Australia a more appealing and straightforward way for British manufacturers to scale their businesses. The gold-standard trade agreement will deliver unprecedented benefits to Australian businesses and create new well-paying jobs.
The UK is a leading maritime nation with the UK Ship Register recognised as a world-class brand. UK shipping companies and UK-flagged ships will benefit from guaranteed market access and fair treatment when operating in Australia. The deal also delivers legal certainty for UK shipping companies and ships operating in Australia by ensuring they have fair access to ports and the right to move empty containers and provide feeder services between Australian ports. This will ensure that the UK maritime sector can operate and sell its services to Australia with increased confidence and guarantees that they will not face any barriers in the future.
Through improved market access for goods and services, the Australia will give Australian exporters a competitive edge when entering the UK market. Australian businesses and consumers will also benefit from greater access to competitively priced goods and services, new technologies and innovative practices. Services are a crucial component of the two-way trading relationship.
Please feel free to contact Custom Brokers for more information on how Australia-United Kingdom Free Trade Agreement (A-UKFTA) can benefit your business.