UK’s free trade agreements with Australia and New Zealand boosts cosmetic brands’ consumer access
06 Jun 2023 --- UK’s new Free Trade Agreements (FTA) with Australia and New Zealand (NZ) have entered into force, with specific cosmetics trade benefits between the two countries. This marks the first deals negotiated “from scratch” following Brexit. The UK government has also published a toolkit to help businesses navigate the export process.
The UK government expects the agreements to increase bilateral trade with Australia by 53% and NZ by 59% in the long term. As the nations share a common language and similar business and legal practices, benefits will include easier and cheaper trading for businesses. NZ will gain access to UK’s NZ$3 trillion (US$1.8 trillion) consumer market for the first time since the UK entered the EU 50 years ago.
“This is a gold-standard FTA, reflecting the close relationship between our two countries. The market access outcomes are among the very best NZ has secured in any trade deal,” says Chris Hipkins, prime minister of NZ.
UK prime minister Rishi Sunak adds: “This deal will unlock new opportunities for businesses and investors across NZ and the UK, drive growth, boost jobs, and most importantly, build a more prosperous future for the next generation.”
The announcement came after the three countries completed their domestic ratification processes. This meant finalizing UK legislation through the Trade (Australia and NZ) Bill.
Australia signed the FTAs in December 2021 and NZ in February 2022. NZ touts it as “one of the highest quality and most comprehensive” trade agreements the nation has ever concluded.
Chris Hipkins, prime minister of New Zealand (Image Credit: NZ gov).
Aligning Australia-UK cosmetic regulation
The Australia-UK FTA features an annex dedicated to the cosmetics trade to reduce the differences in regulation.
Australia will work with the UK through an “international fora” to bring alignment to their cosmetics regulation where appropriate.
“The Annex will make it easier to understand what rules UK businesses need to follow, including on products classified as cosmetics in one system but not the other,” summarizes CTPA.
“For example, UK businesses exporting products such as sunscreens and anti-dandruff shampoos to Australia will be supported to understand whether their product is a cosmetic and what rules they need to follow.”
NZ-UK FTA promotes animal-testing alternatives
The UK-NZ FTA features an article (7.15) dedicated to cosmetic products. Both nations have shared agreements and ongoing collaborations on upholding the ban on animal testing and supporting alternative testing methods. The nations will also work on the “harmonization” of regulations.
“For example, as part of their review of the Cosmetic Products Group Standard, NZ proposed to add the UK to the alternative labeling compliance list. The change is acknowledging cooperation between NZ and the UK under the FTA,” continues CTPA.
In related news, NZ’s Environmental Protection Authority is revising its cosmetics regulation to align with the EU’s policy approach and extend consumer protection. It is also proposing to ban all per- and polyfluoroalkyl substances in cosmetic products starting in 2026.
Don Farrell, Australian minister for Trade and Tourism (Image Credit: Australian gov).
Trade benefits outlined
NZ minister for Trade and Export Growth Damien O’Connor adds the agreement is expected to boost the domestic GDP by up to NZ$1 billion (US$606 billion) and expand goods exports to the UK by over 50%. “From day one, 99.5% of current exports will enter the UK duty-free through a combination of tariff elimination and duty-free quotas.”
“This deal will cut costs for exporters, create opportunities for NZ businesses to grow and diversify their trade, and help tackle rising living costs by delivering quality, price-competitive UK imports,” he continues.
NZ exporters will immediately save approximately NZ$37 million (US$22.5 million) per year on the elimination of tariffs alone, affording to the government.
“Ultimately, all customs duties on all products will be eliminated through this FTA – and the vast majority of these will be removed on the very first day, providing a shot in the arm for exporters immediately,” says Hipkins.
Don Farrell, the Australian minister for Trade and Tourism says: “The deal will help tackle rising living costs in Australia by removing tariffs on UK-made goods.”
Moreover, 99% of Australian products – including wine, short and medium-grain rice, sugar, honey, nuts, olive oil and food supplements – will enter the UK duty-free.
The UK is Australia’s second-largest source of investment, amounting to over AU$1 trillion (US$665 trillion) in 2022.
By Venya Patel
