A NSW Government website
In March last year, following a foreign and defence policy review and an analysis of global trade, the UK government announced that it would be undertaking a post-Brexit Indo-Pacific 'tilt', redirecting its strategic focus to a region it has deep historical ties with. Recent growth forecasts underline some of the thinking behind the decision: according to IMF forecasts, Asia-Pacific is still the fastest-growing region in the world.
Already, there is abundant evidence of the seriousness of the project. In September 2021, the governments of Australia, the United Kingdom and the United States committed to a trilateral security pact, AUKUS. The UK has also formally begun negotiations to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Caption: The Asian Development Bank forecasts that the Asia-Pacific region will grow 5.3 per cent in 2022.
This new strategic direction is opening up a whole suite of opportunities for UK businesses looking for a foothold in the region. In the past, this might have meant opening an office in Hong Kong, but recent events have made the city a less appealing prospect. Now Sydney is emerging as a compelling new gateway to the region.
It has all the prerequisites: a stable government, a compatible regulatory system, a dynamic local economy and great regional connectivity. It’s also anglophone, and in December 2021 the UK and Australia signed a historic free trade agreement that the UK government estimates will unlock £10.4 billion of additional trade while ending tariffs on all UK exports.
Alert to this new opportunity, the NSW Government has recently opened a London office, helmed by Agent General Stephen Cartwright, which will be responsible for encouraging trade between the UK and NSW. Cartwright is quick to highlight the significance of this: “For the first time ever, we will have a full, dedicated team of trade and investment experts working to maximise opportunities between the UK and New South Wales for collaboration, trade, investment, and sharing research and development.”
“Free-flowing international trade and capital inflow provides many benefits for all Australians: it generates jobs, drives innovation, promotes global investment and supports local economic growth.”
Angus McPherson, Managing Director at Diageo Australia
The opportunities are bountiful. NSW has been the driver of Australia’s growth for decades. Its economy is larger than those of Malaysia, Singapore or Hong Kong. As Angus McPherson, Managing Director at Diageo Australia, puts it: “Australia’s success as a nation has always been underpinned by trade, and as a British company with deep Australian ties, we welcome the Australia-UK free trade agreement. Free-flowing international trade and capital inflow provide many benefits for all Australians: it generates jobs, drives innovation, promotes global investment and supports local economic growth.”
Caption: UK foreign direct investment (FDI) in Australia was valued at over A$120 billion in 2020, the country’s third-highest source of FDI that year.
One of the major draws for UK businesses is the state’s diversified economy, which includes a highly regarded food and drink sector. UK importers have already started to buy more Australian wine ahead of the abolition of tariffs, with exports growing 7 per cent in 2021. And the growth in trade looks likely to be reciprocal with UK food and drink manufacturers looking to build on the £4.1 billion of goods currently exported to Australia.
“We have created a fintech bridge between the two countries.”
Stephen Cartwright, Agent General to the United Kingdom
NSW also has a strong defence and aerospace sector, built on a network of universities that are world-leading in quantum technologies, autonomous systems and materials science. The sector, which employs 36,000 people in the state, has strong links to the UK that are likely to get stronger post-AUKUS. As Ben Hudson, CEO of BAE Systems Australia, explains: “This free trade agreement will further support growth in the Australian market through enabling better mobility of highly skilled workforces from Australia and the UK, and the mutual recognition of qualifications. It also further enables the transfer of IP and technology, which is essential for the complex nation-building programmes our company supports in Australia and the UK.”
The technology sector has huge potential, as Cartwright explains: “We have created a fintech bridge between the two countries, knowing there is an opportunity for greater levels of exposure and collaboration from tech companies in financial services. Other opportunities are immediately obvious in biotech, medical tech and agricultural tech.”
The bridge should foster mutually beneficial collaboration between UK and Australian tech companies, increasing overall market share. Anthony Eisen, Co-Founder and Co-CEO of Afterpay, is alert to the two-way benefits of the deal: “The UK–Australia free trade agreement is a great example of how we can take advantage of Australia and the UK’s close relationship to drive growth in our booming fintech sectors. As an Australian-founded company with a strong presence in the UK, this is incredibly important to us.”
Crucially, NSW is aligned with the UK government’s commitment to reach net zero emissions by 2050, and both share an ambition to become sustainable finance hubs. The state’s investment in renewable energies is just part of a wide-ranging package of government support for business, which includes a A$250 million Jobs Plus Program, designed to reduce financial risks and increase speed-to-market for businesses looking to scale and grow in the state.
Stephen Cartwright’s office in London is the front end of this. “Investment NSW has created a concierge service to assist UK businesses interested in investing in the state,” he explains. “It’s a one-stop shop that provides details on government incentives, connects you with local experts in your industry sector and helps with streamlining. For example, they can speed up the planning approvals for new factories. Think of it as an agency that has been deliberately set up to make it as easy as possible for UK companies to succeed in New South Wales.”
Contact the Investment NSW office in the UK.