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UK – Australia free trade agreement offers enhanced trade opportunities for UK exporters


The UK – Australian free trade agreement finally came into effect on 31st May.


According to the UK’s Department for Business and Trade (DBT) the deal is expected to increase trade with Australia by 53%; boost the economy by £2.3 billion; and add £900m to household wages in the long run. DBT has highlighted key benefits of the deal for UK exporters which include the following:

  • Removes tariffs on all UK exports to Australia, making it cheaper to export everything from cars and whisky to UK fashion down under.

  • the agreement allows for flexible rules of origin meaning that UK businesses can use some imported parts and ingredients and still qualify for the new 0% tariffs when exporting to Australia.

  • Permits UK companies to bid for Australian government contracts on an equal footing with Australian companies.

  • UK businesses will have the opportunity to bid for major infrastructure projects such as railway construction or road upgrades as well as for financial and business services procured by Australian government agencies.

  • Allows better access for UK services companies to the Australian market.

  • this means that UK services from architecture and law to financial services and shipping will be able to compete in the Australian market on a guaranteed equal footing.

  • Allows more access to opportunities in Australia by UK investors by giving them guaranteed rights to invest across the Australian economy.

  • the majority of UK investments will no longer need to be reviewed by the Australian Foreign Investment Review Board saving time and money.

  • Makes it easier for UK firms to trade digitally with Australia which will offer specific benefits for UK tech, creative industries, finance, telecommunications, and many other sectors.

  • secures the free flow of data required for many UK businesses to provide many products and services to customers in Australia while locking in a legal requirement for personal data protection in both countries.


The agreement has come into effect at a time when the Australian Federal Government’s growing investments in manufacturing, infrastructure, and agriculture is providing opportunity and demand for machinery, equipment, technology, and services.


On 9 May 2023, Treasurer Jim Chalmers announced Australia’s 2023-24 Federal Budget. The annual Australian Federal Government budget establishes Australia's economic position and fiscal outlook, as well as the Government’s social and political priorities and how expenditure will be allocated over the coming year to achieve these goals.


In 2023-24, the Federal Budget set out a surplus of A$4.2bn (£2.25bn) - the first surplus in 15 years. While the Australian economy has shown resilience during heightened global uncertainty and is expected to outperform major advanced economies, the budget is largely focused on navigating through slow economic growth and managing inflation through investments in key sectors, renewable energy, and welfare programs.


Of particular interest to UK exporters with expertise in road/rail, agriculture, manufacturing/trade and science is the fact that the Australian government is injecting significant investments in these industries. Furthermore the Government will provide A$61.4m (~£32.88m) of funding to support the establishment and operation of the previously announced A$15bn (~US$9.7bn) National Reconstruction Fund (NRF). This fund will be one of the largest peacetime investments in manufacturing in Australian history and finance a wide range of projects across priority areas including:


  • renewables and low emissions technologies

  • medical science

  • defense capability

  • transport.

  • value-add in the agriculture, forestry, and fisheries sectors.

  • value-add in resources.

  • value-add in enabling capabilities (across engineering, data science, software development including fintech, edtech, AI and robotics).

The Australian Government also maintains a strong commitment to a 10-year A$120bn (£64bn) infrastructure pipeline as part of the Infrastructure Investment Program.

Key projects include:

For UK exporters with agricultural expertise, relevant projects include A$1bn (~£535m) to strengthen Australia’s biosecurity system, A$171m (~£91.5m) for Tasmanian irrigators through the National Water Grid fund, and A$38m (~£20.3m) to upgrade agricultural and climate data.

UK exporters may also find market entry opportunities in Australia by working with small to medium-sized enterprises and startups in the country. The Australian Federal Government has established the Industry Growth Program, with a budget of A$392.4m (~£210m). This program provides crucial support for companies looking to commercialise their innovative ideas and scale up their operations.


Chamber members with an interest in learning more about specific opportunities in Australia for their particular product or service are encouraged to reach out to the international trade team who will be happy to schedule for you to speak directly to the Chamber’s in-country partner in Australia – Foley & Associates Pty Ltd. Need help growing your business in Australia?

Author: Angela Foley

Director

Foley & Associates Pty Ltd

Sydney

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