The Jerusalem Post

UK, Australia agree ‘ambitious’ free trade agreement


CANBERRA/LONDON (Reuters) – Britain and Australia announced a free trade deal on Tuesday which the British government hailed as an important step in building new trade relationsh­ips following its departure from the European Union.

Britain said cars, Scotch whisky and confection­ery would be cheaper to sell in Australia because of the agreement, which removes tariffs and reduces red tape. Australia said it was a “great win” for Australian agricultur­e.

The deal is the first bilateral trade accord Britain has negotiated from scratch since leaving the EU last year. The government sees it as an important piece of its post-Brexit strategy to shift Britain’s economic center away from Europe and seek new opportunit­ies in higher-growth Indo-Pacific nations.

Australian Prime Minister Scott Morrison and Johnson overcame sticking points during talks after the Group of Seven advanced economies met in Britain at the weekend. Morrison attended the summit as a guest.

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

Britain is Australia’s eighth-largest trading partner and Australia is Britain’s 20th largest, with twoway trade worth A$26.9 billion ($20.7 b.).

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

Prior to Britain joining the then European common market in 1973, Britain was Australia’s most lucrative trading market.

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

The bigger economic prize could be the precedent the deal sets for freer access in trade that allows Britain’s services sector to export financial, legal and other profession­al services.

“It is a fundamenta­lly liberalizi­ng agreement that removes tariffs on all British goods, opens new opportunit­ies for our services providers and tech firms, and makes it easier for our people to travel and work together,” British trade minister Liz Truss said.

Britain has applied to join a trans-Pacific trading bloc, of which Australia is also a member, that includes other countries where the minister predicted demand for digital, legal and profession­al services will grow rapidly.

That deal, Comprehens­ive and Progressiv­e Agreement for Trans-Pacific Partnershi­p, is also seen as important economic counterwei­ght to China’s influence in the region.

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

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

Australian Minister for Trade David Littleprou­d said Australian farmers would benefit from the deal.

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

Britain’s National Farmers’ Union said it would need to see the details of safeguards and how they could be deployed if the British market became flooded with Australian produce.

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