UK-Australia Free Trade Deal Promises New Opportunities for ILG Customers

In December 2021, the UK signed a free trade agreement with Australia, which will offer some significant benefits for ILG customers with an interest in exporting to the other side of the world.

As the Government seeks to stimulate trade outside the EU in the wake of Brexit, this agreement is the first to have been completed from scratch. It is expected to unlock £10.4 billion of additional trade, as well as opening up a gateway to the fast-growing and lucrative Indo-Pacific region.

You can read about the full scope of the trade agreement in this document but here we have picked out the benefits that are most relevant to ILG customers.

Specific benefits for exporters

The main benefits for ILG customers are:

0% Tariffs

The new deal removes all tariffs for UK exports that meet proof of origin requirements. We know that there will be some flexibility on rules of origin, allowing UK businesses to use some imported parts and still qualify for the new 0% tariffs.

Reduced red tape

The free trade deal is designed to allow exports to Australia a smoother passage through Customs. Provided the necessary requirements have been met, Customs authorities will release goods within 48 hours, or six hours for fast-track parcels and perishable goods. That means e-commerce business can offer customers more attractive delivery times, confident that those promises can be fulfilled.

To help UK businesses prepare their exports for Customs clearance, there will be dedicated websites employing digitised trading systems and digital documents, which will save time and money.

Free trade in the Indo-Pacific region

A further benefit from the new UK-Australia free trade deal is expected to be the opening up of access to the Indo-Pacific market. The UK is applying for membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a free trade agreement between Australia, Canada, Japan, Mexico, New Zealand, Singapore, Brunei Darussalam, Chile, Malaysia, Peru and Vietnam, ratified in 2018. Between them, these 11 markets represent 13% of global GDP, according to the World Bank, with a value of £8.4trillion.

Australia is a strong supporter of the UK joining the CPTPP and the new deal will reinforce the UK’s negotiating position. China, Taiwan and Ecuador have also applied to join, while Thailand, South Korea, the Philippines and Indonesia have indicated their intention to apply. If all these nations are admitted, it would mean free trade access for UK exporters to a a vast non-EU market.

When will the deal come into force?

Following scrutiny by the International Trade Committee, the Environment, Food and Rural Affairs Committee and the House of Lords International Agreements Committee, the agreement will be laid before Parliament. It is expected to come into force later in 2022.

We will keep an eye on developments so we can work with our customers to help them take advantage of this new opportunity. Our global network of carriers and our access to the freight capabilities of our parent company Yusen Logistics will enable us to give our customers a smooth entry into the Australian market as soon as the deal goes live.

More insights >

What are the Benefits of Omnichannel Fulfilment?

Omnichannel fulfilment is the provision of fulfilment services for all of a brand’s retail channels. For most brands these services are split between multiple fulfilment partners. Here we look at the advantages of bringing them all together under one.

Read more

Why Client Service is Key to a Successful Fulfilment Partnership

Successful fulfilment is about more than just meeting orders at peak. Find out how client service can enhance the 3PL experience here.

Read more