The FTA was signed virtually in Adelaide by Australian Trade Minister Dan Tehan and in London by Britain’s Secretary of State for International Trade Anne-Marie Trevelyan.
The agreement eliminates 99 percent of export tariffs, saving Australia over $10 billion (€8.8 billion) on exports such as lamb, cattle, sugar, and dairy. It is projected to save the UK $200 million Australian dollars (€126.5 million) each year on things such as automobiles, whiskey, and cosmetics.
Australian agricultural exporters will also have easier access to the British market, and taxes on Australian wines entering the UK will be reduced by 40 million Australian dollars (€25.3 million) every year. It will be simpler for Australians and Britons to live and work in the other country.
Tehan said the deal, which will take effect sometime in 2022, will grow investments and help with the recovery from the pandemic.
“Our economies will be able to operate seamlessly again,” Tehan said. “The experiences and opportunities that young Australians and young Brits will be able to get through this initiative is just fantastic.”
Britain has aggressively pursued trade agreements after its departure from the European Union. It has touted the deal as its largest “from scratch” agreement to be finalized.
Trevelyan said the deal showed what Britain can achieve “as an agile, independent sovereign trading nation.”
“This is just the start as we get on the front foot and seize the seismic opportunities that await us on the world stage,” she said
The deal may help Britain’s bid to gain access to a Pacific Rim trade initiative, the Comprehensive and Progressive Trans-Pacific Partnership, an 11-nation pact that includes Australia.
Tehan said involving Britain in the CPTPP would help counter trade uncertainty in the Indo-Pacific.
“I look forward to building on this FTA,” he said.
Following months of discussions, prime leaders Scott Morrison of Australia and Boris Johnson of the United Kingdom announced an in-principle agreement in June.
Johnson needed to get the backing of the British agricultural lobby and dispel worries that Britain would be overwhelmed with Australian commodities.
The United Kingdom is Australia’s eighth-largest two-way trading partner, with a 2018 trade value of about 27 billion Australian dollars. It is also Australia’s third-largest services trading partner, with 5.5 billion Australian dollars in service exports and 9.2 billion Australian dollars in imports in the same year.