Businesses that export Australian-made goods will benefit from immediate elimination of tariffs on over 99% of Australian goods exported to the UK, once the agreement is in force in 2022.

In December 2021, The Hon. Dan Tehan MP announced an Australia-UK Free Trade Agreement (FTA) making Australian exports to the UK cheaper, and opening up more opportunities for Australian-made brands in the UK. The Australia-UK FTA is due to be in force in 2022. 

This is the most comprehensive and ambitious free trade agreement that Australia has, other than with New Zealand, showing the Government’s commitment to free trade as a driver of economic growth and strong bilateral relationships.

The Australia-UK FTA delivers benefits for Australians across the board - the biggest win being that exporters will benefit from immediate elimination of tariffs on over 99 per cent of Australian goods exports to the UK, valued at around $9.2 billion, when the agreement enters into force. Australian businesses will also have the right to bid for a greater variety of UK government contracts worth an estimated half-a-trillion dollars annually.

UK businesses will be encouraged to invest in Australia thanks to best practice investment rules, including to set up regional headquarters in Australia to leverage our network of free trade agreements.

There are also benefits to farmers, professionals wanting to enter the UK workforce, young people travelling and more. The Hon. Dan Tehan MP shared details in the Press Release here. 

WHAT THIS MEANS FOR FASHION AND TEXTILE BUSINESSES

For Australian-origin fashion exports, the UK’s tariff will be 0 per cent at entry into force of the FTA.  

For goods to claim the preferential tariff rate under the Agreement, the goods must be Australian-origin (i.e. meet the requirements of Chapter 4 Rules of Origin).  

There are three ways for goods to be Australian-origin:

1. 1. Goods that are wholly obtained in Australia (defined under Chapter 4 Article 4.3).
2. 2. Goods produced using only Australian and/or UK materials, these goods will be originating as they are produced entirely in either or both Australia or the UK (see Chapter 4 Article 4.2 (b) ).  
3. 3. Goods that are produced using materials sourced from countries other than Australia and the UK (non-originating materials).  

In this third case, the production performed on the non-originating materials must meet the relevant Product Specific Rule as listed in Annex 4-B Product Specific Rules here.

You will need to know the HS-Code for the good and then locate the relevant rule.  Goods classified as ‘Textiles and Garments’ are listed between Chapters 50 to 63, with footwear in Chapter 64.  

For greater certainty, you may wish to consider applying for an ‘Advance Ruling’ with the UK HM Royal Customs, which will provide an Australian trader with clarity as to whether the good is originating and can claim preferential tariff treatment under the Agreement (Chapter 5 Article 5.10 https://www.dfat.gov.au/trade/agreements/not-yet-in-force/aukfta/australia-uk-fta-official-text)

For more detailed information, see the official text here, in particular Annex 4B. 

We will wait for the announcement for the date that the FTA will be in force.