Import tariff on UK cars to be scrapped under Free Trade Agreement

A five per cent tariff on UK-made cars coming into Australia is to be removed within weeks thanks to a Free Trade Agreement (FTA) made between the two countries.

Australian consumers are set to benefit from cheaper products, including cars and whisky, with tariffs removed for these imports immediately and all other tariffs eliminated within five years.

The deal, struck yesterday on Aussie Prime Minister Scott Morrison’s visit to his counterpart Boris Johnson in London, was the first major agreement formed since the UK officially left the EU on December 31 last year.

According to the Department for Foreign Affairs and Trade (DFAT), a new free trade agreement with the UK will deliver more Australian jobs and business opportunities for exporters.

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The Nissan Juke is one of the cars made in the UK which could be cheaper under the FTA

Minister for Trade, Tourism and Investment Dan Tehan said: “The FTA is the right deal for Australia and the United Kingdom, with greater access to a range of high-quality products made in both countries as well as greater access for businesses and workers, all of which will drive economic growth and job creation in both countries.”

The agreement in principle will become official once the text has been finalised and signed, and it has passed through parliament in both countries.

"Today marks a new dawn in the UK's relationship with Australia, underpinned by our shared history and common values," Mr Johnson said in a statement.

A spokesman for Jaguar Land Rover Australia, which imports cars from the UK, said it was waiting to see how the final details of the agreement would affect its plans.

"We recognise the UK and Australia’s joint ambition to deliver free and fair access to trade. We will consider the details of the Agreement in Principle once published," they added.

Rolls-Royce also said it was "delighted that a trade deal has been reached, but is awaiting further details".

The Federal Chamber of Automotive Industries (FCAI) said it welcomed the outcome from the Australian/UK Free Trade Agreement negotiations. "The Australian Government should be congratulated on achieving this outcome which will make cars from the UK cheaper for Australian buyers and provide greater access to vehicles featuring the very latest in safety, environmental and engine technology," a spokesman said. "The FCAI strongly encourages the Australian Government to achieve similar outcomes in future FTA negotiations globally."

Whether the deal between the two nations will see the end of Australia’s Luxury Car Tax (LCT) remains to be seen. Last month a spokesman for DFAT told WhichCar “generally” the LCT falls outside of the scope of a free trade agreement, however, they did not rule out any changes to the tax may be possible in future.

UK carmakers which import to Australia

Jaguar

Bentley

McLaren

Land Rover

Mini

Aston Martin

Lotus

Rolls-Royce

Nissan (Leaf, Juke and Qashqai are all built in England)