News that free trade deals with Australia and New Zealand will come into force on 31 May 2023 has been warmly welcomed by exporters, with bilateral trade set to grow by more than half long-term.
Once the agreements come into force, tariffs will be removed on all UK goods exports. Manufacturers will also benefit from flexible rules of origin, meaning they will be able to qualify for tariff-free trade even if the products they export contain parts sourced from other countries.
Going in the other direction, UK import tariffs on the majority of goods from Australia and New Zealand will also be removed.
Reacting to the news, William Bain, Head of Trade Policy at the British Chambers of Commerce said:
“These deals will lower tariffs, simplify customs procedures, allow for greater freedom of movement for labour and provide stronger market access for the UK’s world-leading services sector.
“But the success of any free trade agreement comes down to whether businesses use it, so it’s vital the government shouts from the rooftops about these new opportunities.”
Confectionary company Seed & Bean is one of thousands of exporters who could benefit from the trade deal. Oliver Shorts, the company’s Chief Chocolatier, commented:
“The trade deals with Australia and New Zealand will help us reduce the landed cost of our organic chocolate bars into the two countries. One of the big barriers to entry are the costs involved in getting the goods in, and this will allow us to help any potential distributor margins and permit the product to be a more viable opportunity in the market.”
A survey published in 2021 found that almost a quarter of British businesses considered Australia and New Zealand a significant long-term growth opportunity.
The Department for Business and Trade’s has provided guidance on how to benefit from the new trade agreements on its dedicated webpages for Australia and New Zealand.
Looking further into the future, trade opportunities in the wider Pacific region are expected to increase when the UK joins the huge Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) free trade area.
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