The Australia–United Kingdom free trade agreement (AUKFTA) was signed 17 December 2021. The broad terms of the agreement had been agreed six months earlier, following almost a year of negotiations. It was the first trade agreement signed by Britain since leaving the European Union that was negotiated completely anew.

Background The United Kingdom voted to leave the European Union in the 2016 United Kingdom European Union membership referendum by 51.9 per cent of votes in favour to 48.1 per cent of votes against, in a decision referred to as Brexit. The United Kingdom subsequently left the European Union on 31 January 2020.

Polling conducted by YouGov from 7–8 September 2016, found that Australia was the country that Leave voters most wanted to sign a free trade agreement with, with 47 per cent ranking it as the top priority country.

In 2020, trade between the countries was valued at £13.9 billion. Australia accounts for 0.4 per cent of British exports and 1.3 per cent of imports.

Negotiations The United Kingdom and Australia started negotiations for a free trade deal on 17 June 2020. The broad terms of the agreement were agreed on 14 June 2021, following almost a year of negotiations.

On 15 June 2020, the Australian Government released its negotiating position. Two days later, on 17 June 2020, the UK Government also released its negotiation objectives, outlining what it would like to achieve in a free trade agreement.

Farmers in the United Kingdom expressed concern that prices would be undercut by cheaper Australian imports. Australian beef production sits around of beef per annum, compared to in the United Kingdom. Australian sheep meat production is around , 2 times the UK's output. The British government sought a 15-year cap on tariff-free imports to address these concerns. Polling conducted by Opinium Research found that 61 per cent of Britons prioritised protecting British farmers over signing new trade agreements, with 20 per cent prioritising signing new trade deals.

A year after negotiations began, the agreement was reached over dinner between Boris Johnson and Scott Morrison. The following day, the British government announced that an agreement had been reached in principle.

Agreement

Australia secured a seven-fold increase in tariff-free access to the UK market for its beef and lamb exports, to be phased in after ten years. In return, British citizens under 35 can get working holiday visas for three years instead of the previous two, and Australian employers do not need to show economic necessity to hire them. Observers took the agreement as a sign that the British government, in negotiating future trade agreements with nations with large agricultural sectors, will favour the interests of consumers over farmers.

In mid-2022, as both governments worked towards final ratification, the deal began coming in for heavy criticism on the British side. The National Farmers' Union expressed concern about the possibility that Australian exporters could flood the British market and drive down prices, as well as the lack of any protections for geographical indicators on foods such as Cornish clotted cream. Food-safety groups like the Pesticide Action Network were alarmed that the agreement had no provisions requiring Australian produce comply with stricter British standards. In November, as the Australian parliament's ratification vote neared, George Eustice, a Brexit supporter who had until September been in the Cabinet as Secretary of State for Environment, Food and Rural Affairs and negotiated parts of the deal, reiterated these concerns on the floor of the House of Commons when he denounced the deal, which the British Parliament did not get to vote on, as one-sided, blaming former Secretary of State for International Trade Liz Truss for forcing an agreement to be reached swiftly to make then-Prime Minister Boris Johnson's government look good; he also called for the lead UK negotiation, Crawford Falconer, to be replaced.

British defenders of the agreement noted in response that Eustice had had his chance to block the agreement while he was in the government and did not. They further said that it was unlikely that Australia would be fully exploiting the new quotas, since it did not even meet the current ones and found it more profitable to sell to large markets closer to it in Asia due to the time and distance involved in shipping to the UK. The British government also argued that it had maintained food-safety standards, with Australia agreeing to its high sanitary and phytosanitary (SPS) regulations for all food.

Provisions Under the terms of the agreement in principle, Australia would relax certain rules around working holiday visas for Britons under the age of 35.

Areas Covered in the FTA and Contention Points Trade in Goods: Sanitary and Phytosanitary Measures (SPS): Customs and Trade Facilitation Rules of Origin Technical Barriers to Trade (TBT) Good Regulatory Practices Transparency, Publication, and Administrative Measures Trade in Services, Including Telecommunications and Financial Services Mobility Digital Trade in Goods and Services and Cross-Border Data Flows Investment Intellectual Property Procedural Fairness for Pharmaceuticals and Medical Devices State-Owned and Controlled Enterprises (SOEs) Subsidies Competition Policy Labor Environment Anti-corruption Trade Remedies Settlement General Provisions

Significance

On 15 June 2021, the British Secretary of State for International Trade and President of the Board of Trade, Liz Truss, said that the agreement "paved the way" for the United Kingdom to become a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The United Kingdom formally applied to join the CPTPPP in February 2021 and began membership negotiations on 2 June 2021.

British government estimates suggest that an agreement would grow the British economy by £500 million over the course of 15 years, equivalent to a 0.02 per cent increase in GDP.

The Australian National Farmers' Federation welcomed the deal as an opportunity for increased Australian agricultural exports to the United Kingdom.

On 11 May 2022, the UK Government introduced a Trade Bill to ratify and bring into force the UK-Australia and UK-New Zealand Free Trade Agreements (FTAs) that were signed in December and February respectively.

The Australian Government confirmed it was "confident" the UK-Australia Free Trade Agreement would be ready to be put into action by year's end with thousands more young people set to be eligible for a working visa. The extended negotiation process between the two countries finally drew to an end late 2021 when the then-Johnson and Morrison governments signed the landmark deal.

On 17 November 2022, the Australian Government Joint Standing Committee on Treaties (JSCOT) handed down its report on the Australia–United Kingdom Free Trade Agreement (A-UKFTA). The committee made two recommendations:

The committee recommended the Australian Government implements the recommendations of Report 193: Strengthening the Trade Agreement and Treaty Making Process in Australia, particularly in relation to greater consultation and transparency during the negotiating process, and providing independent modelling and analysis of trade agreements. The committee supports the Free Trade Agreement between Australia and the United Kingdom of Great Britain and Northern Ireland and recommends that binding treaty action be taken. Subsequently, on 22 November 2022, the treaty passed both Houses of Parliament.

A-UKFTA entered into force after Australia and the UK confirmed with each other in writing that they had completed their respective domestic requirements.

Notably, the A-UK FTA also strengthens the people-to-people links between Australia and the UK. Australian professionals now have the same access to the UK job market as nationals from the European Union, except the Republic of Ireland. From 31 January 2024, Australians up to the age of 35 (up from 30) have been able to apply for working holidays in the UK and stay for a maximum of three years instead of two.

Impact

Overall economic and trade impact Prior to the agreement's implementation, computable general equilibrium modeling by the UK Department for International Trade projected that the deal would expand UK gross domestic product (GDP) by 0.08% equivalent to £2.3 billion by 2035 with sensitivity testing placing the expected long-term gain between 0.06% and 0.10%.UK-Australia free trade agreement, House of Commons Library, Number 9484, 12 May 2023, Dominic Webb https://researchbriefings.files.parliament.uk/documents/CBP-9484/CBP-9484.pdf The model anticipated a 53% (£10.4 billion) overall expansion in bilateral trade, driven by a projected £6.2 billion (44%) increase in UK exports to Australia and a £4.2 billion (66%) increase in UK imports from Australia. Additionally, long-term real UK wages were estimated to grow by 0.1% (£900 million annually) as economy-wide productivity improved and workers reallocated across sectors.

Post-implementation monitoring data published by the Department for Business and Trade across the agreement's first two years (May 2023 to June 2025) indicated that total bilateral trade grew by 14.3% (£2.8 billion) to reach £22.6 billion, compared to overall UK trade growth with the rest of the world (+0.02%) over the same period. By mid-2025, services accounted for 69.2% of total bilateral trade. Between June 2023 and December 2024, 65.9% of eligible UK exports to Australia used tariff preferences, saving an estimated £89 million in duties, while 77.3% of eligible UK imports from Australia used preferences, saving an estimated £139 million. Because 89.7% of UK goods imports from Australia were already tariff-free under Most Favoured Nation rules, preference-eligible goods comprised 10.3% of total UK imports from Australia.

Sectoral and regional impact Prior to the agreement, economic modeling estimated that 20 out of 23 broad economic sectors in the UK would expand. The largest absolute Gross Value Added (GVA) increases were projected in service industries led by wholesale and retail trade (+£340 million), public services (+£265 million), and business services (+£210 million) alongside advanced manufacturing sectors such as machinery (+£230 million) and motor vehicles (+£200 million). Over the same period, total UK goods exports to Australia fell by 16.3% (-£839 million), reflecting a wider global decrease in UK goods exports (-8.4%).

At the regional level, initial government modeling projected long-term GVA growth across all UK nations and English regions, with the largest proportional gains expected in the West Midlands (+0.14% / £195 million), the North East (+0.12% / £65 million), and the North West (+0.10% / £189 million). Projected absolute output gains for the devolved nations were £120 million for Scotland, £58 million for Wales, and £21 million for Northern Ireland. Post-implementation goods trade statistics showed regional variation: goods exports to Australia grew from the South West (+11.3%) and Wales (+24.6%), whereas exports contracted from Northern Ireland (-34.0%) and the West Midlands (-3.8%).

Agriculture and agri-food sectors