Free trade has long been a pillar of Australia’s economic strategy. In 2025, as global dynamics shift and new trade agreements come into effect, Australians are re-evaluating what free trade means for their wallets, businesses, and future prospects. Whether you’re an SME owner eyeing export markets or a consumer curious about price changes at the checkout, understanding the current state of free trade is more relevant than ever.

Australia’s Free Trade Landscape in 2025

Free trade refers to the elimination of tariffs, quotas, and other barriers to the exchange of goods and services between countries. Australia has a proud history of pursuing free trade agreements (FTAs), with over a dozen bilateral and multilateral deals in place. In 2025, several developments are reshaping the landscape:

Australia-UK Free Trade Agreement (A-UKFTA): Fully in force, this agreement has eliminated tariffs on 99% of Australian exports to the UK and vice versa, making it easier for Australian wine, beef, and lamb to reach British consumers.
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP): Australia remains a key member, with the agreement expanding to include the UK and ongoing negotiations with new applicants.
Indo-Pacific Economic Framework for Prosperity (IPEF): Australia is an active participant, focusing on supply chain resilience, clean energy, and digital trade with partners across the region.

These agreements are designed to increase market access, reduce costs, and stimulate economic growth. For example, the A-UKFTA is projected to boost Australia’s GDP by over $1.3 billion over the next decade, according to government forecasts.

The Real-World Impact: Winners and Challenges

Free trade isn’t just a topic for economists and policymakers—it has tangible effects across the Australian economy. Here’s how:

For businesses: Exporters of beef, dairy, wine, and services benefit from reduced tariffs and simpler customs procedures. SMEs, in particular, are finding it easier to enter new markets thanks to digital trade provisions and streamlined regulations.
For consumers: Free trade brings a greater variety of goods at lower prices, from electronics to specialty foods. In 2025, Australian consumers are already noticing price drops on imported vehicles and tech products due to the removal of import duties.
For workers: While trade can create jobs in export-focused industries, it can also expose some sectors to stiffer competition. The government’s 2025 Trade Diversification Fund provides grants and upskilling programs to help workers transition into high-growth industries.

Case in point: Western Australian winemakers have reported a 30% increase in exports to the UK since the A-UKFTA came into effect. Conversely, some local manufacturers are facing pressure from cheaper imports, prompting calls for innovation and value-adding strategies.

2025 Policy Updates and Global Trends

Free trade in 2025 isn’t without controversy or complexity. Several policy updates and trends are shaping the conversation:

Trade and Sustainability: Australia’s new FTAs now include commitments on environmental standards and carbon reduction. The government’s 2025 Green Export Incentive offers tax breaks to exporters with low-carbon products.
Supply Chain Security: The COVID-19 pandemic highlighted vulnerabilities in global supply chains. In response, Australia is investing in domestic manufacturing of critical goods, even as it maintains open trade policies.
Geopolitical Tensions: Ongoing trade disputes and shifting alliances, especially in the Indo-Pacific, mean that Australia must balance openness with national security. The recent tightening of export controls on sensitive technologies reflects this new reality.

For Australian businesses, staying informed and agile is key. The Department of Foreign Affairs and Trade regularly updates its online FTA portal with new opportunities and compliance requirements, ensuring exporters can adapt to changing rules.

The Bottom Line: Is Free Trade Still Worth It?

Free trade remains a cornerstone of Australia’s economic strategy in 2025. While the benefits—greater market access, consumer choice, and economic growth—are substantial, they come with challenges that require careful management. With new policy tools, support for affected industries, and a focus on sustainable trade, Australia is aiming to make free trade work for everyone.