Australia revels in UK trade deal as alliance ‘more important than it’s been in years’

Australia 'has a lot to offer UK in a free trade deal' says expert

When you subscribe we will use the information you provide to send you these newsletters. Sometimes they’ll include recommendations for other related newsletters or services we offer. Our Privacy Notice explains more about how we use your data, and your rights. You can unsubscribe at any time.

The UK and Australia have reached an agreement on a trade deal. It marks the first time Britain has struck a deal from scratch in decades and is a landmark achievement after the country left the EU. Australia’s Prime Minister Scott Morrison has been in the UK after attending the G7 summit, later visiting Prime Minister Boris Johnson at Downing Street.

It was here that the pair are believed to have come to an agreement over a dinner of Welsh lamb and Scottish smoked salmon, washed down with Australian wine.

Many note that the deal could open doors for further trade deals in the Asia-Pacific region.

The UK Government says membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) could provide British farmers with huge opportunities, a group which it was given the green light to start membership talks with this month.

Australia has also long observed the benefits of entering into a trade agreement with Brexit Britain.

The country’s export industries have, in recent years, largely been geared towards East Asian nations like South Korea, China and Japan.

But a trade war with China has focused Australia’s visions further afield.

According to an analysis piece published by the Australian Institute of International Affairs late last year, striking a free trade deal on things like farming and services with Britain has been high on the country’s agenda.

It said: “The alcohol industry is a telling example of the endurance, fortitude, and potential of the deepening trading relationship.

JUST INUK’s new £20bn Norway trade deal backed by Oslo

“The Australian wine industry thrived in the UK despite the imposition of the CCT, and despite Britain’s close proximity to two of the world’s best wine producers, France and Italy.

“An additional caveat is that China, Australia’s largest wine exporter, itself placing tariffs on Australian wine, the potential for Australian wine producers is considerable.

“In keeping with alcohol, an FTA would also see more Scotch whisky imported to Australia, which contributes an average £114million to the Scottish economy.”

Australian Senator Simon Birmingham summed up what it means to Canberra, arguing: “The symbolism and ongoing policy benefits of nailing an ambitious agreement now, is probably more important than it has been in years.”


Brexit victory! UK and Australia agree terms of free trade deal [REPORT]
Scots faced with ‘85% percent tax rate’ under SNP free income policy [INSIGHT]
Brexit: Single Market ‘distortion’ as EU ‘weaponising peace’ 

While it notes the estimated benefit to the UK of an Australian free trade deal would be just 0.1 to 0.4 percent, “it would be a mistake to dismiss the significance of the FTA based on its GDP implications”.

It added: “What remains pertinent and continues to be so is that according to the Federation of Small Business (FSB), of all the British small businesses that export, a total of 38 percent export to Australia, which is only expected to rise upon an FTA.

“So, although minimal in its overall GDP impact, a comprehensive small business portfolio is worthy of consideration.”

Mr Morrison will be pleased with the trade deal as, according to the Australian government’s Department of Foreign Affairs and Trade (Dfat), the UK is “one of Australia’s most important partners”.

It is the country’s fifth largest trading partner, with the two-way goods and service trade valued at $36.7billion (£20bn)in 2019-20.

Services are a particularly crucial component of the relationship, accounting for 7.7 percent of total trade.

Dfat said a free trade deal would allow either country to become more integrated in each other’s services market, aiding mutual recognition of “professional qualifications, and providing greater certainty for skilled professionals entering the UK labour market”.

Announcing the deal, Downing Street said the new pact meant British products such as cars, Scotch whisky, biscuits and ceramics would be cheaper to sell to Australia.

However, concerns have been raised over farming and what more relaxed export rules might mean for British agriculture.

Farmers have previously raised concerns about the potential of a zero-tariff and zero-quota trade deal which could see them undercut by cheap imports.

In Australia, farmers are permitted to use some hormone growth promoters, pesticides, and feed additives that are banned in the UK.

And, according to the National Farmers Union (NFU), Australian farmers are able to produce beef at a lower cost of production, and could undercut farmers in the UK.

Source: Read Full Article