UK and Australia agree ‘comprehensive and ambitious’ Australian Free Trade Deal

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Australian Free Trade Deal – Britain and Australia on Tuesday announced a free trade agreement, which the British government described as an important step in building new trade ties after leaving the European Union.

SUMMARY

  • UK PM Johnson: Deal is sign of global trade re-opening
  • Deal cuts all tariffs on UK goods imports into Australia
  • UK says deal protects British farmers
  • Agreement likely to yield small boost to UK economy

Australian Free Trade Deal

Britain said cars, Scotch whiskey and confectionery would be cheaper to sell in Australia as the deal removes tariffs and reduces red tape. Australia said it was a “great victory” for Australian agriculture.

Australian Free Trade Deal
Britain’s Prime Minister Boris Johnson and Australia’s Prime Minister Scott Morrison speak at 10 Downing Street, ahead of a meeting to formally announce a trade deal, in London, Britain, June 15, 2021. Dominic Lipinski/PA Wire/Pool via REUTERS

The deal is the first bilateral trade deal Britain has negotiated since leaving the European Union last year. The government sees this as an important part of its post-Brexit strategy to move Britain’s economic hub away from Europe and to seek new opportunities in high-growth Indo-Pacific countries.

Australian Prime Ministers Scott Morrison and Johnson overcame sticking issues during talks after the Group of Seven advanced economies meeting in Britain over the weekend. Morrison attended the summit as a guest.

“I think it’s important economically, there’s no question about it … but I think it’s more important politically and symbolically,” Johnson said. “We are opening up to each other and this is the prelude to a common campaign to open up around the world.”

Australian Free Trade Deal
British Prime Minister Boris Johnson meets with Australian Prime Minister Scott Morrison at Downing Street in London, Britain, June 14, 2021. REUTERS/Henry Nicholls

The UK is Australia’s eighth largest trading partner and Australia is the UK’s 20th largest, with two-way trade of A$26.9 billion ($20.7 billion).

“This is the most comprehensive and ambitious agreement that Australia has concluded,” Morrison said.

Before Britain joined the then European Common Market in 1973, the UK was Australia’s most lucrative trading market.

The full agreement is yet to be published. According to British official estimates, this could add 500 million pounds to the country’s economic output in the long term, a tiny fraction for an economy of around £2 trillion.

Australian Free Trade Deal
British Prime Minister Boris Johnson bumps elbows with Australian Prime Minister Scott Morrison at Downing Street in London, Britain, June 14, 2021. REUTERS/Henry Nicholls

big prize

The big economic reward could be an example of a deal set for free access to trade that allows the UK services sector to export financial, legal and other professional services.

British Trade Minister Liz Truss said, “This is a fundamentally liberalization agreement that removes tariffs on all British goods, opens up new opportunities for our service providers and tech firms, and makes it easier for our people to travel and work.” is.”

The UK has applied to join a trans-Pacific trading bloc, of which Australia is also a member, which includes other countries where ministers will rapidly increase demand for digital, legal and professional services.

The agreement, the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership, is also seen as an important economic countermeasure to China’s influence in the region.

Australian Free Trade Deal
British Prime Minister Boris Johnson meets with Australian Prime Minister Scott Morrison at Downing Street in London, Britain, June 14, 2021. REUTERS/Henry Nicholls

The deal with Australia will be scrutinized by British farmers, who fear they could be put out of business if the deal eliminates tariffs on imports of sheep and beef.

Britain said its farmers would be protected by a cap on duty-free imports for 15 years.

Australia’s Trade Minister David Littleproud said the deal would benefit Australian farmers.

“Overall, this is going to be a big win for Australian agriculture,” Littleproud told 4BC radio.

Britain’s National Farmers Association said it would have to look into the details of the safeguards and how they could be deployed if the British market was flooded with Australian produce.

“The ultimate test of this trade deal will be whether it contributes to taking farming around the world to a more sustainable level, or whether it undermines UK farming and only affects the environment and animals of the food we eat.” Welfare exports the effect,” said NFU president Minette Batsmen.

($1 = 0.7086 pounds)

($1 = 1.2970 Australian Dollar)

Reporting by Colin Packham; Editing by Simon Cameron-Moore

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