Australia’s first free trade agreement with a dedicated chapter on innovation will come into effect at the end of the month, promising a new era of collaboration with the United Kingdom.
Prime Minister Anthony Albanese on Thursday evening, while in the UK for the Coronation, announced May 31 as the official starting date for the Australia-UK free trade agreement (A-UKFTA).
The A-UKFTA received Royal Assent in March following its passage through the UK Parliament, and was signed off in Australia last November.
The agreement, which also includes a chapter dedicated to digital trade, commits both nations to collaborative measures, such as a Strategic Innovation Dialogue and an Innovation and Early Career Skills Exchange Pilot (IECSEP) visa program.
The FTA defines innovation as including “the development or implementation of a new or improved product, process, or organisational method, or combination thereof”.
IECSEP will make 3,000 visas over two years available for UK citizens to work in Australia. The Innovation stream permits up to three years of work for UK citizens who are “highly experienced and skilled” in areas such as renewable energy, artificial intelligence, MedTech, FinTech, AgriTech, and research and development.
AI, digital, and other emerging technologies are flagged in the agreement as of particular importance.
Through the Strategic Innovation Dialogue, the two nations will meet at least once every two years to share research, industry practices, and governance, as well as encouraging commercialisation, regulatory development, research and development investment, and trade from May 2024.
Non-government experts or other stakeholders are eligible to be invited to participate in the dialogue.
Under the digital trade chapter, the two countries are committed to exchanging information and best practices on “laws, regulations, policies, enforcement, and compliance regarding digital trade” around cybersecurity, digital government, electronic contracts, and online consumer protection, among other areas.
In particular, Australia and the UK will promote compatibility of digital identity regimes, including the development of “appropriate frameworks and common standards to foster technical interoperability between each Party’s implementation of digital identities” and “implementing use cases for the mutual recognition of digital identities”.
It also includes a bilateral restriction on the implementation of local data storage requirements. This clause is similarly included in the Digital Economy Agreement signed with Singapore.
The A-UKFTA was signed in December 2021, under the previous Coalition government, but only passed through the Australian Parliament in November 2022. It passed through the UK Parliament at the end of March.
Two-way trade in goods and services with the UK was valued at $21.7 billion in 2021, making it Australia’s 12th largest trading partner.
The Commonwealth government expects savings of approximately $200 million a year when tariffs on UK imports to Australia are eliminated. All UK imports will be duty free five years from the implementation of A-UKFTA.
Speaking on Friday (AEST) morning, Prime Minister Anthony Albanese said he would discuss the ongoing development of a free trade agreement with the European Union with President of the European Commission Ursula von der Leyen while attending the coronation of British monarch King Charles III.
Mr Albanese also noted that he has had two meetings with UK Prime Minister Rishi Sunak on A-UKFTA.
In a statement, Mr Albanese said that A-UKFTA would “will deliver significant benefits to Australian exporters, consumers, workers, and our economy more broadly”.
“The Australia-UK FTA represents one of the most comprehensive, innovative and ambitious free trade agreements concluded by Australia to date and strengthens an already close relationship between Australia and the UK,” he said.
The statement was released jointly with Trade minister Don Farrell who said the “agreement will underpin and deepen the already strong bilateral investment relationship with our second-largest source of foreign direct investment in Australia”.
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