Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Prime Minister, Senator Birmingham. Can the minister please explain to the Senate how the Australia-UK free trade agreement enhances and strengthens Australia's economic recovery?

Simon Birmingham (SA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Smith for his question. I know that Senator Smith, like all coalition senators—but perhaps none more so than Senator Smith—welcomes the in-principle agreement of the Australia-United Kingdom Free Trade Agreement.

Senator Wong interjecting—

Indeed, Senator Wong. I have no doubt that Senator Smith will be sending a tariff-free bottle of Australian craft-made gin for Her Majesty any time soon.

I am pleased to confirm that the Australia and the UK have reached in-principle agreement in relation to this free trade agreement, a free trade agreement that will once again deliver more jobs for Australians and more opportunities for Australian exporters, and bring both our countries closer together in this current strategically-challenging environment. This was an agreement negotiated from scratch in record time, reflecting the close affinity of our two nations and the robust industrial logic of the agreement that is being delivered. This free trade agreement is the right deal for both Australia and the UK, providing each of our nations with greater access to a range of high-quality products, greater access for businesses and workers, and greater access for quality services exchange, driving economic growth and job creation.

It is significant that the UK turned to Australia to negotiate its first bilateral agreement since leaving the European Union. The UK was already Australia's fifth-largest trading partner in 2019-20, with two-way trade worth $36.7 billion and the second-largest source of investment stock, valued at $738 billion. And, pleasingly, under this agreement, the UK will liberalise Australian imports into the UK, with 99 per cent of Australian goods set to enter the UK duty free. This is good news for our farmers, our businesses and Australian jobs.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Smith, a supplementary question?

Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

Can the minister advise how this free trade agreement demonstrates the coalition government's broader commitment to free trade?

Simon Birmingham (SA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

This agreement builds on a tremendous record of delivering expanded trade opportunities for Australian exporters, for Australian farmers and for small businesses across the nation. Under the coalition, 10 free trade agreements have been concluded, growing the coverage of Australian exports that enjoy preferential access into international export markets from around 26 per cent of exports when we were elected to office to now around 75 per cent of Australia's exports that will enjoy that market advantage in international export markets as a result of these trade agreements. These free trade agreements with our major trading partners—be they the North Asian partners; be they the recently concluded, and entered into force, agreement with Indonesia; be they the multiparty agreements, such as the Trans-Pacific Partnership or the Regional Comprehensive Economic Partnership; or indeed our close partnership with our Pacific island partners—are enhancing opportunities for economic growth across these partners.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Smith, a final supplementary question.

Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

Can the minister outline to the Senate what the benefits are of free trade to Australia and to every Australian?

Simon Birmingham (SA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Enhanced export opportunities create more jobs for more Australians. All of the research shows that they generate more high-paying Australian jobs and, in doing so, help to create the business and economic strength and resilience to fund the essential services that all Australians rely upon. Australian businesses that export hire, on average, 23 per cent more staff, pay 11 per cent higher wages and have labour productivity 13 per cent higher than non-exporters. Trade of goods and services represented some 40 per cent of Australia's GDP in 2020.

We have delivered time and again in terms of expanding the choice and range of opportunities for Australian exporters. Our government has made sure that we expand those opportunities across our new region of ASEAN nations, across our broader region in North Asia, across the Pacific—with new trade agreements providing access to Mexico and Canada for the first time ever—and now to the UK, and we aspire to the EU and other agreements to be struck in the months and years to come.