Prime Minister Boris Johnson hailed a 'new dawn' in the UK's relationship with Australia as he agreed a historic free trade deal with Australian PM Scott Morrison. The two countries have also agreed to intensify cooperation on security, climate change and science and technology.
The UK has secured a trade deal with Australia eliminating tariffs on all UK goods in the first major deal negotiated from scratch since the UK 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 on Monday 14 June. A final Agreement in Principle will be published in the coming days.
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. The UK exported £5.4 billion worth of services to Australia in 2020, including £1.4bn of insurance and pension services and £780m of financial services. 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.
In addition 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;
- jobs and businesses across British industries producing these products will grow even faster;
- tariffs will he eliminated on Australian favourites like Jacob’s Creek and Hardy's wines, swimwear and confectionery, boosting choice for British consumers and saving households up to £34 million a year;
- British farmers will be protected by a cap on tariff-free imports for 15 years, using tariff rate quotas and other safeguards;
- ambitious commitments on market access for services professionals, cutting-edge digital provisions and reduced barriers to investment for the UK’s large service sector;
- agricultural producers will be encouraged to increase their exports overseas, including to new markets in the Indo-Pacific; and
- Brits under the age of 35 will be able to travel and work in Australia more freely, opening exciting opportunities for young people.
The Prime Minister Boris Johnson said -
Today marks a new dawn in the UK’s relationship with Australia, underpinned by our shared history and common values.
Our new free-trade agreement opens fantastic opportunities for British businesses and consumers, as well as young people wanting the chance to work and live on the other side of the world.
This is global Britain at its best – looking outwards and striking deals that deepen our alliances and help ensure every part of the country builds back better from the pandemic.
The benefits of the new deal will effect all corners of the United Kingdom, including:
- Scotland, who exported £126m of beverages to Australia in 2020 and will enjoy removing tariffs of up to 5% on Scotch Whisky;
- Wales, who is home to 450 businesses exporting to Australia including innovative life science companies and chemicals manufacturers;
- Northern Ireland, who will enjoy zero tariffs and simplified customs procedures on their exports, 90% of which are machinery and manufacturing goods used extensively in Australia’s mining, quarrying and recycling sectors; and
- the Midlands and north of England car manufacturers who will see tariffs of up to 5% cut, boosting demand for their cars and parts.
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.
N.B. Parliament will have the opportunity to scrutinise the agreement in detail once the text is published, along with an impact assessment and explanatory memorandum.
