The United Kingdom (UK) is set to launch two free trade agreements (FTAs) with Australia and New Zealand on May 31, marking the country’s first two FTAs negotiated from scratch since leaving the European Union. The agreements are expected to raise bilateral trade with Australia by 53% and with New Zealand by 59% in the long term.
The trade deals were negotiated after British Prime Minister Rishi Sunak met with his Australian counterpart Anthony Albanese and New Zealand Prime Minister Chris Hipkins in London. They are expected to drive economic growth and innovation across all three countries by removing tariffs on all UK goods exports, opening unprecedented access for services, cutting red tape for digital trade, and making it easier for UK professionals to live and work in Australia and New Zealand.
According to an official release, the agreements “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,” said Prime Minister Sunak.
The final legislative changes needed to bring the trade deals into action have now been made by the UK and Welsh governments. Services, which account for around 80% of the UK’s economic output and workforce, are central to the country’s economy and one of its biggest export success stories.
The trade deals also offer other benefits to the UK, including investment opportunities and access to government contracts, 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 will be available for all British goods with flexible rules of origins, giving businesses a competitive edge over international rivals. There will also be reaffirmed commitments to the Paris Agreement and opportunities to grow the UK’s low-carbon economy, with tariffs on environmental goods liberalized.
The agreements include robust protections for British farmers, with staging tariff liberalization for sensitive goods over time. Both Australia and New Zealand are key members of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), a huge trade bloc in the Asia-Pacific region.
Overall, the UK’s free trade agreements with Australia and New Zealand are expected to bring a host of economic benefits, while strengthening ties between the countries and opening up new opportunities for trade and investment.