UK and Australia agree 'comprehensive and ambitious' free trade deal
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[June 15, 2021]
By Colin Packham and William James
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
centre 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.
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"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 two-way trade worth A$26.9 billion ($20.7
billion).
"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.
BIGGER PRIZE
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 liberalising 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.
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![](../images/061521pics/busine45.jpg)
British Prime Minister Boris Johnson bumps elbows with his
Australian counterpart Scott Morrison at Downing Street in London,
Britain, June 15, 2021. REUTERS/Henry Nicholls
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Britain has applied to join a trans-Pacific trading bloc, of which Australia is
also a member, that includes other countries where minister predict 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 scrutinised 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.
"The ultimate test of this trade deal will be whether it contributes to moving
farming across the world onto a more sustainable footing, or whether it instead
undermines UK farming and merely exports the environmental and animal welfare
impact of the food we eat," NFU President Minette Batters said.
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($1 = 0.7086 pounds)
($1 = 1.2970 Australian dollars)
(Reporting by Colin Packham, William James and Andy Bruce; Editing by Simon
Cameron-Moore, Stephen Coates and Timothy Heritage)
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