The UK is Australia’s seventh largest trading partner, with two-way trade valued at $27.8 billion in 2017-18. Investment is a cornerstone of our relationship, with the UK being the second-largest source of total foreign investment in Australia, valued at $481.4 billion in 2017.
Australia and the UK established a Joint Trade Working Group (TWG) in September 2016 to scope out the parameters of a future, comprehensive free trade agreement (FTA) and exchange views on global trade policy issues and developments. Four formal meetings of the Australia–UK TWG have now been held. Working Group leads have maintained regular contact.
Both governments have committed to ensure an expeditious transition to FTA negotiations when the UK has left the European Union (EU). EU rules provide that the UK may not commence FTA negotiations with third-country parties until after Brexit (currently scheduled for 29 March 2019). A formal consultation process will be announced closer to the launch of negotiations.
Key interests and benefits of an Australia-UK FTA
- A comprehensive, high-quality Australia-UK FTA would help to ensure our trade and investment relationship reaches its full potential.
- An Australia-UK FTA would remove barriers to trade in goods.
- An Australia-UK FTA could expand services linkages and investment ties.
- An Australia-UK FTA could modernise the rules governing trade in goods, services and investment between Australia and the UK. These new rules could better facilitate digital economy and innovation.
Parliamentary inquiry into Australia’s trade and investment relationship with the United Kingdom
In December 2016, the Trade Sub-Committee of the Parliament’s Joint Standing Committee on Foreign Affairs, Defence and Trade (JSCFADT) commenced an inquiry into Australia’s trade and investment relationship with the United Kingdom. The Terms of Reference for the inquiry instructed the Committee to examine, among other matters, ‘the merits and risks of a possible bilateral free trade agreement with the UK, and potential features of such an agreement’.
The Committee has held a number of public hearings and, to date, received over 70 submissions. A joint submission [PDF] was produced by the Department of Foreign Affairs and Trade (DFAT), the Australian Trade and Investment Commission (Austrade), the Export Finance and Insurance Corporation (EFIC), and Tourism Australia.
The Committee published an Interim Report in October 2017, which summarised its findings to date and noted that it would present its final report and recommendations in the lead up to the conclusion of the ‘Brexit’ negotiations.
The Committee’s final recommendations, along with the submissions it has received, will help to inform Australia’s positions in future discussions and negotiations with the UK.
The UK Parliament’s International Trade Committee has separately launched an inquiry examining the potential for a new trade relationship with Australia. DFAT submitted written evidence to this inquiry [PDF].