- Benefits of ground-breaking free trade deals with Australia and New Zealand to be unleashed for British businesses and consumers later this month
- First trade deals negotiated from scratch by the UK and tailored to our strengths as a services-led economy
- Trade deals deliver on the Prime Minister’s priorities to grow the economy and drive innovation
British businesses and consumers will soon be able to reap the benefits of the UK’s first trade deals negotiated from scratch since leaving the European Union with the agreements set to come into force this month.
Expected to increase bilateral trade with Australia by 53% and with New Zealand by 59% in the long term, the two game-changing free trade agreements are anticipated to go live across all three countries from midnight on 31 May.
It comes as the Prime Minister meets both the Australian Prime Minister, Anthony Albanese, and the Prime Minister of New Zealand, Chris Hipkins, tomorrow for talks in Downing Street ahead of the Coronation.
Both trade deals will drive economic growth and innovation across the UK, Australia and New Zealand through the removal of tariffs on all UK goods exports, open unprecedented access for services, cutting of red tape for digital trade, and by making it easier for UK professionals to live and work in Australia and New Zealand.
It comes just weeks after the UK concluded negotiations to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), a free trade area worth £9 trillion, putting us at the heart of a trading powerhouse.
Prime Minister Rishi Sunak said:
As some of our closest allies, and greatest friends, I am delighted our first built from scratch trade deals are with Australia and New Zealand.
These landmark deals squarely deliver on my priorities to drive economic growth, boost innovation and increase highly skilled jobs across the UK, ensuring we and our closest friends continue to prosper for generations to come.
Business and Trade Secretary, Kemi Badenoch, said:
With these two deals the UK is using our status as an independent trading nation to tailor agreements to our country’s economic strengths. Alongside our recent conclusion of talks to join CPTPP, the government is forging a bold new future alongside the world’s most dynamic and fast-growing economies.
Putting these trade deals into action will help create new opportunities for business, boosting wages and helping spur economic growth.
The UK and Welsh Governments have now made the final legislative changes needed to bring the trade deals into action.
Services are central to the UK’s economy, accounting for around 80% of its economic output and workforce, and one of its biggest export success stories. The provisions in these deals complement our strengths and will help deliver on the PM’s priority of growing our economy.
UK professionals from scientists and researchers to lawyers and accountants will have access to Australian work visas without being subject to its changing skilled occupation list. Brits will also be able to work more freely in New Zealand through commitments which enable UK service suppliers to deliver contracts.
Other UK benefits include:
- Investment opportunities and access to government contracts, including putting British businesses on equal footing to compete for an additional £10 billion of Australian public sector contracts per year and high investment screening thresholds for UK investors in New Zealand
- Tariff free access to both markets for all British goods and flexible rules of origins, giving businesses a competitive edge over international rivals
- Reaffirmed commitments to the Paris Agreement and opportunities to grow our low-carbon economy, with tariffs on environmental goods liberalised
- Removal of UK import tariffs on majority of goods from Australia and New Zealand, reducing prices for UK consumers on favourites such as wine and manuka honey and lowering costs on machinery parts for UK manufacturers
- Progressive rules on digital trade and free flow of data, cutting red tape for SMEs and easing trade while protecting intellectual property, brands and innovations
There are robust protections for British farmers in both deals, including staging tariff liberalisation for sensitive goods over time.
Both countries are key members of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), a huge trade bloc in the Indo-Pacific.
Businesses have welcomed the news, including:
Grimshaw, a global architecture practice with its origins in the UK, where it is known for its work on the global Eden projects as well as Waterloo Station, London Bridge station and the line-wide design for the recently opened Elizabeth Line.
It has been working in Melbourne since 2002 – instigated by its first project in that city, Southern Cross Station. In Sydney, the studio was established in 2010 and has designed and delivered important projects in infrastructure as well as commercial architecture, tertiary education and research laboratories including the Sydney Light Rail, Martin Place Metro Station and the recently completed Poly Centre, 210 George Street. Both studios have grown to now comprise nearly a third of Grimshaw’s world-wide staff.
It has also been working in New Zealand for almost a decade on the City Rail Link. In June 2023, it is due to formally launch its new studio in New Zealand and its Auckland premises will open with approximately 20 full time staff.
Mark Middleton, Global Managing Partner at Grimshaw, said:
Our approach has always been characterised by the same motivations and thinking which are the very essence of free trade – the movement of people and goods without restrictive tariffs or conditions. But with the advent of the new UK-Australia Free Trade Agreement, we can now approach the mobility of our architects through simplified and liberated arrangements for transfers between our studios.
Also of great importance to us is the integration into the UK-Australia FTA of the assurance that architects from both countries can provide services under contract in either country. This, combined with the provision that those architects within our practice who now wish to transfer between the UK and Australia can work for four years, double the previous term, provides us with much welcomed certainty as we construct our teams and extend our collaboration. This important development is mirrored in the UK-New Zealand agreement where UK architects can now transfer to our Auckland studio for three years.
With the formalisation of the new Australian and New Zealand FTAs, we now operate with a much welcome assurance that our business can continue to attract both our global collaborators and new talent to our Australasian studios, assuring our continuing growth and prosperity.
Seed & Bean, founded in London 2005 with the idea to create an ethical range of confectionery. The company previously exported to Australia and New Zealand, however this ceased due to COVID. It maintains an ambition to export to both nations again and the Free Trade Agreements (FTAs) would help do that.
Seed & Bean’s Chief Chocolatier Oliver Shorts said:
The trade deals with Australia and New Zealand will help us reduce the landed cost of our organic chocolate bars into the two countries. One of the big barriers to entry are the costs involved in getting the goods in, and this will allow us to help any potential distributor margins and permit the product to be a more viable opportunity in the market.
As part of the two Free Trade Agreements, originating British food and drink products will benefit from reduced tariffs.
The Fifth Wheel Company, which manufactures luxury leisure vehicles in North Wales. The company’s export sales make up over 40% of its annual turnover with its products reaching as far as Australia and New Zealand.
Fifth Wheel’s Technical Director, John Gethin Whiteley, said:
We believe our products are the best in the world and the Australia and New Zealand trade agreements will allow us to increase our export sales to these regions. As the Fifth Wheel concept is a recognised method of towing in Australia and New Zealand, and the appetite from the public is ever growing to live off grid and explore, we see a massive potential for our products in this marketplace and are actively looking for partners to help us grow.
As a result of the Free Trade Agreements, tariffs on all products will be removed making it more competitive for UK manufacturers to export their products to these markets.
- The agreement is expected to enter into force on the 31 May, subject to finalisation of UK domestic procedures with remaining changes to UK law coming into force at the end of May.
- Please see here for more information on the UK-Australia free trade deal.
- Please see here for more information on the UK-New Zealand free trade deal.
Link: Landmark post-Brexit trade deals to come into force this month driving economic growth across the UK
Source: Assent Information Services