The UK-Australia Free Trade Agreement and Government Procurement

The United Kingdom and Australia have a long-standing historical relationship, and their economic ties are set to become even stronger with the recent signing of the UK-Australia Free Trade Agreement. This landmark agreement covers various aspects of trade and investment between the two nations, including government procurement. By focusing on the procurement of government projects, this article aims to shed light on the UK-Australia Free Trade Agreement from the perspective of UK businesses.

Enhanced Market Access: The UK-Australia Free Trade Agreement offers the UK expanded access to Australia’s government procurement markets. This means that UK businesses can compete on an equal footing when bidding for Australian government projects. Increased market access fosters competition and creates opportunities for UK companies to expand their operations into Australia and generate economic growth.

Streamlined Procurement Processes: One of the key advantages of the UK-Australia Free Trade Agreement is the commitment by Australia to streamlining procurement processes. The agreement emphasizes transparency, fairness, and efficiency in Australia government procurement, ensuring that UK companies have a level playing field when participating in Australian project bids. Simplified procedures and reduced bureaucracy help facilitate trade and encourage cross-border collaboration.

Non-Discriminatory Treatment: The free trade agreement provides non-discriminatory treatment to UK companies in government procurement. This means that businesses from the UK cannot be discriminated against when competing for Australian government contracts. The agreement promotes fairness and encourages open competition, enabling the selection of UK suppliers based on their merits and value for money.

Potential for Increased Trade and Economic Growth: By facilitating government procurement opportunities, the free trade agreement creates an environment conducive to increased trade and economic growth for the UK. The removal of barriers and the promotion of fair competition will encourage UK businesses to explore new markets and seek partnerships in Australia. This increased trade has the potential to boost innovation, create jobs, and stimulate economic development in both nations.

Chapter 16 of the Free Trade Agreement sets out the principles and mechanisms to achieve the above objectives by including specific obligations when dealing with the procurement of Australian government contracts. A few important provisions are listed below:

1. Treatment of goods and services from the UK in the same way it treats its Australian domestic goods and services.
2. Applying rules of origin of goods or services imported or supplied by the UK must not be different than the rules of origin Australia applies in the normal course of trade imports.
3. No procuring Australian entity can seek, impose or enforce any offset at any stage of the procurement.
4. A duty on Australian procuring entities to limit conditions for participation in procurement to only those that are essential and may not impose a condition that a supplier has previously been awarded a contract.
5. Australian registration systems, qualification procedures and technical specifications must not create unnecessary obstacles to participation for UK businesses.
6. Strict rules if an Australian entity uses limited tendering (entity contacts a supplier of its choice) to procure goods or services and also creates an obligation on Australian entities to prepare a report indicating the circumstances that justified the use of limited tendering.
7. Australian procuring entity to treat all tenders under procedures that guarantee fairness and impartiality.
8. Disclosure of information by Australian entity to unsuccessful supplier with reasons and the relative advantages of the successful supplier’s tender.
9. Australia must establish or designate an impartial administrative or judicial authority to review challenges, complaints or breaches of Chapter 16.
10. Australian entities must facilitate participation of UK SMEs in government procurement by providing tender information free of charge, conducting procurement by electronic means, simplifying administrative processes and requiring prompt payment to SMEs and encourage the use of SMEs in subcontracting.

Annexure 16A (Schedule of Australia) provides a list of over 90 Australian government entities which are subject to the rules and sets out the contract values which trigger the application of the rules.

Conclusion: The UK-Australia Free Trade Agreement strengthens the economic ties between these two nations, with government procurement being a significant aspect of the agreement. The enhanced market access, streamlined procurement processes, non-discriminatory treatment, and increased investor protections provide a solid foundation for businesses to thrive in the procurement of Australian government projects. This agreement not only benefits UK companies but also promotes trade, economic growth, and mutual prosperity for both the United Kingdom and Australia. As the partnership between these nations continues to deepen, the future looks promising for UK businesses seeking to tap into new opportunities.

If you have any questions about this article, or would like to know more about Free Trade Agreements, please contact us to speak to a member of our Commercial Team.