Guidance

UK-Australia Free Trade Agreement: chapter explainers

Published 16 December 2021

1. Initial Provisions and Definitions

This chapter includes initial provisions applicable to the whole agreement and establishes a free trade area between the UK and Australia. It also includes general definitions used, the territorial scope and a provision that considers the effects of the Protocol on Ireland/Northern Ireland.

2. Trade in Goods

The chapter will provide for the liberalisation of trade of originating goods between the UK and Australia. It will remove tariffs in accordance with each party’s tariff schedule.

The chapter will also help to facilitate trade in goods between the UK and Australia. This will be done by reducing non-tariff barriers, increasing transparency and cooperation, and supporting the World Trade Organization (WTO) rules-based system.

Australia has agreed to remove tariffs on all UK goods exports with most exports being tariff-free from entry into force of the agreement. A small number of tariffs on UK exports of cheese and steel will move towards complete liberalisation over a 5-year period.

The UK has agreed to liberalise tariffs on most Australian exports. We have protected sensitive UK industries through measures including staged liberalisation, tariff rate quotas, and product specific safeguards for beef and sheepmeat. A general bilateral safeguard mechanism will provide further protections if they face serious injury from increased imports as a direct consequence of the free trade agreement (FTA). This applies to all products.

3. Trade Remedies

Trade Remedies provide further protections for domestic industry against unfair trading practices or unforeseen surges in imports of goods.

The chapter includes a general bilateral safeguard mechanism. This allows for temporary import restrictions to protect industry from serious injury or threat thereof, as a result of increased imports through the FTA. Bilateral safeguards can be applied by either party and to all categories of product. 

The chapter also affirms both countries’ rights and obligations under the World Trade Organization (WTO) agreements allowing members to apply trade remedies. 

4. Rules of Origin and Origin Procedures

This chapter and its product specific rules annex contain provisions related to the rules of origin for goods. These stipulate how much of a product must originate in the UK to qualify for the lower tariff when exported to Australia and vice versa.

It reflects modern production processes and global value chains and minimises red tape for businesses ensuring administrative processes are clear, straightforward and low cost. 

This ensures that most UK car exports should be eligible for preferential tariffs without manufacturers needing to significantly change their supply chains.

5. Customs Procedures and Trade Facilitation

This chapter contains provisions relating to customs procedures and practices. It ensures that custom procedures in both countries are transparent and that the provisions reinforce the UK and Australia’s ability to maintain effective customs control.

This chapter will benefit UK exporters by providing traders with greater certainty about the customs clearance process and minimising the cost of trading.

6. Sanitary and Phytosanitary Measures

This chapter contains provisions related to the application of food safety and animal and plant health regulations. It commits to provisions that facilitate trade whilst ensuring the protection of human, animal and plant life and health.

This agreement does not create any new permissions or authorisations for imports from Australia. All products imported into the UK must, as they do now, comply with our import requirements.

7. Technical Barriers to Trade

This chapter contains provisions related to technical regulations, standards, and conformity assessments (testing whether a product meets the rules of the other nation).

It commits to ensuring that any regulations either side introduces:

• are non-discriminatory
• do not create unnecessary obstacles to trade

We have agreed particular cooperation on cosmetics, medical devices, and human and veterinary medicines, with the intention of reducing trade barriers for these industries.

8. Cross Border Trade in Services

This chapter and associated annexes outline the market access and treatment that the FTA guarantees to British businesses, providing long-term certainty and transparency for service suppliers exporting to and operating in the Australian market.

For the first time, both Australia and the UK have agreed on a standalone professional services chapter. This addresses trade barriers related to professional services and the recognition of professional qualifications. This underlines the importance of the sector to both countries’ economies.

We have agreed a sectoral annex on international maritime transport services that will benefit UK shipping companies and ships flying the UK flag. We have also agreed an annex on express delivery services that ensures UK suppliers operating in Australia can do so on a level playing field. 

In the associated services schedules Australia has locked in market access commitments. These provide greater transparency and legal certainty than in any of its previous FTAs, through listing at both the federal and sub-federal level.

9. Financial Services

This chapter contains provisions that lock in the existing openness in financial services between the UK and Australia. This provides greater legal certainty and maximises UK companies’ ability to continue to deliver high-value financial services to clients in Australia.

The agreement also establishes new world leading terms for closer regulatory cooperation to increase interaction and strengthen the relationship between UK and Australian regulators.

Commitments have been made for UK financial service providers and, in particular, non-life insurance providers. This goes further than the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and other FTAs Australia has signed.

10. Professional Services and Recognition of Professional Qualifications

This chapter contains provisions that seek to address barriers to trade related to professional services and recognition of professional qualifications. It encourages relevant bodies to establish and maintain systems for recognition of professional qualifications.

The chapter also establishes a legal services regulatory dialogue, designed to address behind the border barriers to legal services trade.

The chapter contains provisions that guarantee UK and Australian lawyers can provide legal advisory services in home, foreign, and international law, using their existing qualifications.

11. Temporary Entry for Business Persons

This chapter and associated annexes contain provisions that bind in visa arrangements for highly skilled business people. This ensures greater certainty and new access for temporary business travel between the UK and Australia.

It guarantees high-skilled British workers can apply for Australian temporary visas without having to worry about Australia’s changing skilled occupation list.

It also commits both sides to not introducing labour market testing for each other’s visa regimes.

12. Telecommunications

This chapter contains provisions that commit to ensuring service suppliers have access to public telecommunications networks on a timely, reasonable and non-discriminatory basis.

It also commits us to work together on security and diversification in the telecommunications sector, including on infrastructure and technologies.

13. Investment

This chapter and associated schedules contain provisions that commit to strengthening the investment relationship between the UK and Australia. UK investors will benefit from broader and deeper market access than Australia has ever guaranteed in a previous trade agreement.

14. Digital Trade

This chapter contains provisions that support increased growth in digital trade between Australia and the UK.   

The chapter ensures the free flow of trusted data and world-leading standards for personal data protection. It also ensures the legal recognition of electronic contracts, signatures and various electronic trust services.

15. Intellectual Property

This chapter contains provisions on the treatment and protection of intellectual property (IP). This will support our vibrant economies through adequate, effective and balanced protection and enforcement of IP rights that encourage innovation and creativity.  

16. Government Procurement

This chapter and associated schedules ensure that covered government procurement opportunities in the UK and Australia are non-discriminatory and transparent.

The chapter maximises opportunities for suppliers to participate in UK and Australian government procurement markets. This includes new legally guaranteed access for UK businesses to approximately £10 billion per year worth of government procurement opportunities at both federal and state-level in Australia.

17. Competition Policy and Consumer Protection

The Competition Policy and Consumer Protection chapter ensures both Parties promote open and fair competition.

The chapter proscribes anticompetitive agreements, anticompetitive practices by entities that have substantial market power and addresses mergers that may have substantial anticompetitive effects.

The chapter locks in procedural rights for people and businesses under investigation by competition authorities, such as ensuring they have the right to be legally represented. The chapter promotes cooperation between UK and Australian competition and consumer protection authorities.

The chapter ensures that UK and Australian consumers are protected from misleading, fraudulent and deceptive practices. It ensures goods provided are of satisfactory quality and services are performed with reasonable skill and care. In the event this is not the case, the chapter ensures consumers can access appropriate redress mechanisms.

18. State-Owned Enterprises and Designated Monopolies

The chapter commits the Parties to rules on how State-Owned Enterprises (SOEs) are run and transparency requirements. These provisions will ensure open and fair competition between private enterprises and businesses owned by Australian or UK governments.

The chapter also provides for cooperation in improving rules concerning SOEs internationally, such as at the World Trade Organization (WTO).

19. Small and Medium-Sized Enterprises (SMEs)

This chapter contains provisions to help Small and Medium-Sized Enterprises (SMEs) take full advantage of the opportunities this FTA presents. This includes commitments to have dedicated websites to help exporters, online tariff databases and other trade-related information that can be easily searched online.

20. Innovation

This chapter contains provisions that provide a mechanism for the UK and Australia to discuss the impact of innovation on trade. This includes on regulatory approaches, commercialisation of new technologies and supply chain resilience. This will help ensure that the FTA remains fit for purpose as our economies grow.  

This chapter is the first of its kind in any FTA.

21. Labour

This chapter contains provisions that relate to maintaining high labour standards. It commits both nations to lock in high domestic protections for workers and encourage good business practice. It also advances our mutual ambition to tackle forced labour and modern slavery.

This chapter also includes protections against gender discrimination in employment.

22. Environment

The chapter sets out our shared commitment to building mutually supportive trade and environment policies. It establishes cooperative efforts to support the green economy and clean growth through trade. It includes commitments to ensure that neither Australia nor the UK can derogate from, waive, or fail to enforce their domestic environmental laws in order to promote trade or investment.

This chapter preserves our right to regulate to meet environment and climate change objectives. It affirms our shared commitment to tackle climate change, including under the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement.

The chapter commits both parties to strengthen cooperation in a range of issues such as sustainable forest management, the circular economy and marine litter to tackle shared environmental challenges. It also reaffirms our commitments under multilateral environment agreements, such as the Convention on International Trade in Endangered Species of Wild Fauna and Flora.

23. Development

The UK-Australia Development Chapter breaks new ground as the first chapter of its kind in an FTA between 2 developed nations.

This chapter acknowledges the importance of trade as a tool for economic growth and poverty reduction. It demonstrates our commitment to work with Australia on trade and development issues both bilaterally and multilaterally.

It includes provisions that recognise the value of joint development activities. It also facilitates cooperation, sharing of best practice on technical assistance and capacity building in support of developing countries.

It also allows for monitoring of the impacts of the agreement on developing countries.

24. Trade and Gender Equality

This chapter on Trade and Gender Equality will enable the UK and Australia to work together to support women as business owners, entrepreneurs, and workers. This will ensure they can fully access and benefit from the opportunities created by this Agreement.

This chapter complements provisions which advance gender equality across this Agreement in the chapters on Labour, SMEs, Digital and Financial Services.

25. Animal Welfare and Antimicrobial Resistance

This chapter contains provisions that recognise the importance of, and commit to maintaining, high levels of animal welfare protection. It also commits both parties to cooperate on the important issue of combatting antimicrobial resistance. This is the first time Australia has included a dedicated animal welfare chapter in any FTA.

26. Good Regulatory Practice

This chapter contains provisions that commit to supporting a transparent and predictable regulatory environment for business.

This includes commitments to make regulations accessible, ensuring public consultations when designing regulations and to encourage regulatory authorities to cooperate on current and future regulation.

27. Cooperation

This chapter establishes a committee overseeing areas of cooperation between the UK and Australia. It sets out how the Parties will engage on matters relating to the environment, trade and gender equality, development, labour, anti-corruption, and anti-microbial resistance, amongst other subjects. It provides a forum for the parties to discuss these matters on a regular basis.

28. Transparency and Anti-Corruption

This chapter contains provisions that commit both parties to the promotion of transparency in government decision-making. It also encourages the participation of the private sector and civil society in these pursuits.

It also reaffirms both parties’ commitment to their international obligations at the Organisation for Economic Co-operation and Development and United Nations to combat bribery and corruption.

29. Administrative and Institutional Provisions

This chapter contains provisions governing the committees and working groups set up under the agreement.

It establishes a Joint Committee that will provide a forum to discuss trade related matters and ensures the smooth operation of the agreement.

30. Dispute Settlement

This chapter contains provisions that commit both Parties to effective and timely dispute settlement. This will provide a clear avenue to arbitration if required.

31. General Provisions and Exceptions

This chapter ensures flexibility for the UK government to protect legitimate domestic priorities through a series of exceptions and general provisions.

32. Final Provisions

This chapter contains provisions related to the application, amendment, and termination of the agreement as well as its entry into force.