The Australia-UK Free Trade Agreement (A-UK FTA) entered into force on 31 May 2023. It is the UK's first FTA designed from scratch and sets new global standards for digital, tech and services.
With a progressive environment chapter and world-first chapters on innovation and development, the deal is tailored to areas of strength for both countries. It paves the way for closer collaboration in emerging sectors such as cleantech, quantum, cyber and AI.
Australia's A$167 billion tech sector is our third-largest industry, accounting for 8.5% of GDP. This represents a big shift for a country that has traditionally focused on mining and agriculture. It is also an indicator of Australia's ambitions. Australia already has 30+ years global leadership in quantum research, we also rank the 5th most powerful cyber nation, and our fintech sector ranks 6th in the world.
The new FTA aims to accelerate the commercialisation of emerging technological innovations in these critical areas. The agreement provides pathways and removes roadblocks for UK and Australian tech leaders to collaborate and solve the world's biggest problems. This allows our two countries to remain competitive in the global marketplace.
So, what's in the deal?
The A-UK FTA guarantees equal treatment for businesses that work in each other's jurisdiction. This includes the guaranteed right to bid on government contracts on equal footing, and the guaranteed right to invest across each other's economies.
The deal also allows Australian and UK regulators to work more closely together and align regulation to make it easier for businesses to innovate and scale their solutions in each other's jurisdiction.
The A-UK FTA secures the free flow of data between countries. It eliminates localisation requirements, which means that data can be hosted in each other's jurisdiction.
The deal allows businesses that set up in each other's jurisdiction to bring talent with them. The FTA's mutual recognition of qualifications allows service providers to work in each other's country. The Innovation and Early Careers Skills Exchange Pilot program also makes it easier for UK talent to come and work in Australia.
Finally, the world's first dedicated innovation chapter establishes a Strategic Innovation Dialogue which will drive the commercialisation of new technology and ensure the deal keeps up with technological developments. The inaugural Dialogue took place in April 2024. Innovation priorities raised in the inaugural Dialogue include battery manufacturing, offshore wind, and safe and responsible AI.
The A-UK FTA provides new pathways for collaboration in emerging technologies
The A-UK FTA creates a platform where our collective expertise can be used to solve very real and commercially relevant problems. Both Australia and the UK have a strong footprint in academic research. New pathways provided by the FTA combined with strong industry connections enable us to fast-track solutions and compete for innovation on a global scale.
Australia's Q-CTRL is a global leader in the development of quantum technologies. In May 2023, Q-CTRL opened an office in the UK. Earlier this year, they were awarded £1 million in funding from the UK's Small Business Research Initiative (SBRI).
Q-CTRL will use this funding to deliver new quantum software to the UK's Department for Transport and Network Rail. The software will address train schedule optimisation for large-scale rail networks and detailed station routing.
Leading UK microscopy and analysis company Oxford Instruments has been well known to Australia for over four decades. In December 2023 they established a direct presence in Australia. Oxford Instruments is at the commercial end of quantum technology. Quantum technology is essential to the energy transition, not just because of its ability to accelerate environmental research, but also to help develop advanced materials.
Over 20 percent of Oxford Instrument's products are used in net zero applications. These include materials analysis tools that are being used to optimise development of solar cell technology and develop corrosion-resistant steel to build offshore wind turbines. The plasma polishing technique developed by Oxford Instruments is used at every stage of electric vehicle production - from battery research to quality control and safety monitoring.
Collaboration between Australia and the UK addresses climate change
The A-UK FTA will make it easier for UK and Australian companies to export clean technologies and expertise, which will speed up the transition to our net zero goals.
In October 2023, the importance of collaborative research and its ability to make a positive impact on the world was celebrated when four solar pioneers, including the Australian scientists Martin Green and Andrew Blakers, were awarded the Queen Elizabeth Prize for Engineering - the world's most prestigious engineering prize - for their groundbreaking research into solar cell technology.
The team's innovations helped reduce the cost of solar panels by 80 percent in the last decade, with solar now the lowest cost option for bulk electricity supply. Their PERC technology accounts for close to 90 percent of the global solar cell market.
Hydrogen is another emerging sector with major opportunities for collaboration between Australia and the UK.
Australian hydrogen technology company Rux Energy has a goal to directly contribute to abating 10 million tonnes of carbon dioxide equivalent emissions annually by 2030. Rux aims to achieve this by using its patented nanomaterial technology to tackle the energy transition's largest problem related to hydrogen: storage. The technology works like a sponge to absorb hydrogen, enabling storage at higher densities.
Potential applications are highlighted in the recently announced UK Shoreside Power from Optimised Hydrogen Lifecycle (SPOHL) project. The project sees Rux collaborating with industry and academic partners in the UK to demonstrate the feasibility of moveable green hydrogen-powered generators to power ships at port. These generators could cut marine diesel usage by around one-third and port carbon emissions by around 90 percent.
Recently announced EU legislation could further accelerate collaboration between Australian and UK climate techs and industry. On the back of the new CBAM legislation introduced by the European Union (EU), importers of CBAM goods in the EU are required to report a set of data, including emissions embedded in their goods. This provides opportunities for leading Australian and UK fintechs and SaaS companies to work with industry to not only track emissions but also actively drive emissions reductions.
In short, we're excited to see what new innovative solutions are developed as businesses take advantage of the provisions in this forward-looking Free Trade Agreement. These provisions could create an open market between Australia and the UK where businesses no longer need to view each market in silo. And where they can leverage data across both jurisdictions to create better products and services for their customers.