Australia-UK Free Trade Agreement
What the New Free Trade Agreements Mean for Supply Chains
British, Australian and New Zealand businesses and consumers will benefit from the UK’s first negotiated-from-scratch trade deals since leaving the European Union in 2020.
The Free Trade Agreements (FTA) negotiated by the UK Government with both Australia and New Zealand went live across all three countries starting at midnight on 31 May. The UK government expects these trade agreements to increase bilateral trade with Australia by 53% and with New Zealand by 59% over time giving these countries a competitive edge over international rivals.
Australian Prime Minister Anthony Albanese said the agreement “will deliver significant benefits to Australian exporters, consumers, workers, and our economy more broadly.”
He added: “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.”
Benefits of the Australia-UKFTA
Under the new Australia-UK Free Trade Agreement (A-UKFTA), tariffs will be removed for all UK goods exports to Australia and for over 99% of Australian goods exports to the UK over time. According to Don Farrell, the Australian Minister for Trade and Tourism, the trade agreement “will significantly reduce costs for exporters and assist Australian businesses seeking to diversify trade to a wider range of overseas markets.” He notes the A-UKFTA will lead to a reduction of prices for UK consumers on Australian favourites such as wine, manuka honey as well as electrical equipment, cosmetic products and lower costs on machinery parts for UK manufacturers.
Savings of around AUD200 million a year are expected for Australian consumers with the elimination of tariffs on imports from the UK. All UK imports will enter Australia tariff free after five years and will help the Australian economy by easing cost-of-living pressures for households and costs for businesses.
SEKO Logistics Australia’s GM Commercial, Callan Bryce, describes the advantages for Australian businesses: “Unlocking the trade barriers for both Australian and British businesses creates exciting new opportunities for SEKO’s clients. We’ve seen a huge growth in Australian ecommerce exports with the recent VAT changes for low-value imports. With A-UKFTA the demand for authentic and quality Australian products is expected to increase further proudly supported by SEKO’s Ecommerce, ocean, air, and fulfillment expertise in both markets.”
The deals are also expected to open unprecedented access for services which currently account for around 80% of the UK economic output and workforce, cut red tape for digital trade, and make it easier for citizens of the UK to live and work in Australia and New Zealand and vice versa. Additionally, the relaxation of tariffs on environmental goods is considered a reaffirmation of the British, Australian and New Zealand commitments to the Paris Agreement and growing a low-carbon economy.
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