Anne-Marie Trevelyan – 2022 Statement on UK-Australia Free Trade Agreement

The statement made by Anne-Marie Trevelyan, the Secretary of State for International Trade, in the House of Commons on 5 January 2022.

Thank you, Madam Deputy Speaker. In a former incarnation, I was indeed in that other role.

I am really delighted to be able to report to the House that, just before Christmas, the Australian Trade Minister, Dan Tehan, and I signed a comprehensive free trade agreement between the United Kingdom and Australia. This agreement deepens our bond of common values and a shared belief in the combined power of democracy, free trade and high standards. This is the first new trade deal the UK has negotiated from scratch since leaving the European Union. It is truly a world-class partnership, allowing our businesses to trade and invest more freely.

The deal will uphold high standards and foster collaboration on challenges such as tackling climate change, unfair trading practices and growing the low-carbon economy, going further than ever before in many important areas and showing what we can do as an independent trading nation. It eliminates tariffs on 100% of UK exports, and includes 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. It gives UK firms new legally guaranteed access to bids for over £10 billion of Australian Government contracts on an equal footing with Australian firms. It provides unprecedented new opportunities for young Britons to live and work in Australia, and it paves the way for the UK to join the comprehensive and progressive agreement for trans-Pacific partnership, or CPTPP, which would further open 11 markets worth £8.4 trillion in GDP for British exporters and investors. Accession to the CPTPP could see 99.9% of UK exports being eligible for tariff-free trade with some of the biggest economies of the present and future, from Japan to Mexico, and from Canada to Indonesia, Malaysia and Singapore. Unlike EU membership, it would achieve that while allowing us to continue to keep control over our laws, our borders and our money.

This deal is expected to increase trade with Australia by more than 50%. It is expected to add £900 million to household wages, and to deliver a boost for the economy of over £2 billion by 2035—compared with what we would see if we did not have a deal—benefiting communities and helping to level up every region and nation of our United Kingdom.

The agreement that I have signed delivers for the whole of the Union. The economies of Wales, Scotland and Northern Ireland are estimated to benefit from a combined boost of £200 million, and the economic impact assessment that we have published shows that the west midlands, the north-east, the north-west, the south-east, the south-west and Wales are set to see the biggest proportional gains. The deal will benefit Scotland’s financial services industry, boost innovative aerospace design and manufacture in the west midlands, provide new opportunities for Welsh fintech companies, allow Northern Ireland’s manufacturers to export more competitively, and help car makers to support thousands of jobs in the north-east.

The agreement means that Australia will remove tariffs from all its UK imports, making it more competitive for the 15,300 UK businesses who currently export iconic products such as Jaguar and Aston Martin cars, Scotch whisky, London gin and UK fashion to Australia. It will encourage new companies to enter the market, including small businesses and family-run firms which will find it easier, cheaper and faster to sell their fantastic goods and services to Australia for the first time. It also delivers for consumers. The removal of UK tariffs on Australian favourites such as Jacob’s Creek and Hardys wines will help to keep prices down. UK manufacturers will benefit from cheaper access to important Australian machinery parts, allowing them to be more competitive and to grow.

The agreement means that investing in Australia will be easier than ever before. It more than quadruples the threshold that UK investments need to meet before being subject to review by Australia’s Foreign Investment Review Board, which will help to save time, save money and cut red tape. The UK’s world-class services industry will now have unprecedented and legally guaranteed access to the Australian market, allowing UK legal and engineering firms to compete on an equal footing with domestic firms in Australia.

Ambitious tech start-ups, financial services firms and the creative sectors will benefit from new opportunities to trade digitally. The agreement secures the free flow of data while locking in a legal requirement for personal data protection in both countries, guarantees fair access to Australia for telecoms companies, and forges greater co-operation on 5G and cyber-security. It includes the world’s first dedicated innovation chapter in a free trade agreement, establishing a strategic innovation dialogue to ensure that the deal keeps up with technological developments and drives the commercialisation of new technologies.

Our British businesses will also benefit from unrivalled new access to business visas, allowing staff to relocate more easily and travel more freely to work in Australia. It will enable Britons aged 18 to 35 to travel and work in Australia for up to three years, and they will no longer have to work on a farm to obtain a working holiday maker visa. Australian firms will no longer have to prioritise hiring Australian nationals over a British national. Additionally, executives and managers who are transferred to their company locations in Australia will have the right to stay for four years instead of two. They can also bring their spouses and dependent children, who will have the same four-year right to work.

The agreement has been crafted through consultation with UK businesses and interested parties at all stages of the negotiations. It offers a suite of arrangements going further than Australia has ever gone with any other country in a free trade agreement, which is a testament to the strength of our relationship and the hard work of my brilliant officials at the Department for International Trade and their Australian counterparts. It includes ambitious commitments to work together in addressing the shared challenges of environmental conservation, women’s economic empowerment and poverty reduction. It includes a commitment to maintain high animal welfare standards.

We have also secured protections relevant to the NHS and Australia’s health system in the agreement, which keep the NHS out of scope of the agreement. The NHS is not, and never will be, for sale to the private sector.

British food and drink is world-renowned for its quality, and this trade deal will deliver benefits to the industry—from tariff-free access to the Australian market to faster customs arrangements. The deal could see a wide range of iconic UK products, including Scotch whisky, Irish cream and Welsh cider, given protected geographical indication status in Australia. By creating new opportunities, this deal will help continue a trend of booming UK food and drink exports to Australia, which have more than doubled in the last decade. So we should be unafraid of fair competition and positive about the export opportunities that exist.

Let me also take the opportunity to alleviate the concerns of some colleagues regarding meat imports from Australia. The reality is that beef imports from Australia account for only a small fraction of our overall beef imports. Just 0.1% of all Australian beef exports went to the UK last year. Also, it is relatively unlikely that large volumes of beef and sheep will be diverted to the UK from lucrative markets in Asia, which are much closer to Australia. More than 75% of Australian beef and 70% of Australian sheepmeat exports last year went to markets in Asia and the Pacific—markets that we are also keen to grow in through our membership of the CPTPP.

With regard to animal welfare and food standards, we have been clear throughout this process that we will not compromise on our high standards, and we have delivered on that. All imports into the UK will have to comply with our existing food standards requirements—including the ban on hormone-treated beef. The deal also includes a dedicated chapter and non-regression clause on animal welfare. This will help to ensure that neither country lowers their animal welfare standards in a manner that impacts trade.

This agreement also supports the UK’s climate change commitments, reaffirming both parties’ commitments to all of the Paris agreement objectives—the first time that Australia has included a substantive climate change article in any trade deal. It also sets out areas for future co-operation on emissions reduction, zero emissions technology, energy efficiency and sustainable transport. So UK businesses will benefit from zero tariffs on all low-carbon exports to Australia, including of wind turbine parts and electric vehicles, creating more opportunities to grow the low-carbon economy.

The Government are committed to transparency and inclusiveness in all our future trading arrangements, and the House will now have substantial opportunity to scrutinise this deal in detail. We have already presented the full treaty text, a draft explanatory memorandum and the independently scrutinised impact assessment to Parliament, and we anticipate that there will now be a period of several months before the agreement is formally laid before Parliament for the 21 sitting days of formal scrutiny under the Constitutional Reform and Governance Act 2010, otherwise known as CRaG. That will allow ample time for the Trade and Agriculture Commission to prepare its advice, as well as for the International Trade Committee and International Agreements Committee to produce a report on the agreement, should they so wish. I have already written to the new Trade and Agriculture Commission to seek its advice on the deal with respect to our domestic statutory protections for agriculture. That will help me to inform the Government’s own report on this issue, as required under section 42 of the Agriculture Act 2020. I also wish to highlight that any legislative changes required to give effect to the deal will be scrutinised by Parliament in the usual way ahead of ratification.

So this is a landmark agreement and will be a feature of the relationship between our two great countries for many years to come. As a newly independent trading nation, the UK is reaching out to seize the opportunities of the future—opportunities that we are uniquely well placed to take. The deal I have signed with Australia, one of our closest and most important allies, is just the latest chapter in our progress towards that brighter future, forging an open, enterprising economy, enabling us to build back better from the pandemic, and levelling up every region and nation of our United Kingdom.

I commend this statement to the House.