This week marks the entry into force of the UK trade agreements with Australia and New Zealand – the first entirely new trade deals which the UK has negotiated with key trading partners in the post-Brexit era. It is fitting that countries with whom we share much common history and values offer much for business growth through these new deals. By 2035, the Australia deal could benefit the economy by £2.3bn per year, and the New Zealand deal by £0.8bn per year over the long-term, with benefits likely across the UK.
Our defence and security partnerships with Australia have been greatly enhanced in recent years. And both of our partners are strategic allies in the region of the world with the highest levels of global growth for UK goods and services until the end of this decade and beyond – Asia-Pacific. Those ties will grow once the UK’s accession to CPTPP is ratified over the next year.
Combined bilateral trade with Australia and New Zealand amounted to £17.6bn last year. Inward foreign direct investment stock from both countries into the UK is £16.6bn, and in the other direction of a combined £42.1bn in investment. These new agreements offer a step change to grow both our trade and investment links substantially, and procurement opportunities for UK companies in the Australia and New Zealand markets.
UK businesses are looking forward to the new opportunities offered by these agreements. For the exporting paint manufacturer we met in Doncaster, lower tariffs and reduced regulatory compliance burdens will allow export growth to Australia. For UK firms exporting environmental goods and services to New Zealand, the agreement offers world leading terms on green trade. As the WTO recently pointed out, if we get the trade and investment fundamentals in place we can double green trade by 2030. This deal offers an example on how to create that potential.
Both agreements enhance growth friendly long-term partnerships for the UK – zero-tariff trade on the vast majority of goods, removal of regulatory compliance barriers, co-operation on digital trade to boost services exports and e-commerce sales of goods, strong access to growing services markets in Australia and New Zealand. They also offer reciprocal and generous business travel schemes, and welcome temporary worker and youth mobility schemes too – extended upwards to under 35s almost immediately with New Zealand, and due to be phased in over the coming years with Australia. These arrangements will allow 18-35 year olds from the UK to live and work in Australia and New Zealand for up to 3 years, and vice versa.
For business, trade agreements are only as much good as the benefits which can be realised for businesses large, medium and small. That’s why the new Preference Utilisation Unit within Government will need to work closely with business to ensure maximum take up of these new trade preferences, and generate higher levels of exports in goods and services to Australia and New Zealand.
Business is ready to lead in forging closer links with our New Zealand and Australian counterparts. Not at the expense of our current trading relationships but to add to those. In a time of pessimism about global trade these agreements offer the prospect of a better future. It’s now time to roll up our sleeves and for business and government across our three nations to make it happen.