Australia, Britain reach free trade deal to cut many tariffs

UK PM Johnson, Australias Morrison agree historic free trade agreement

Number 10 said it would make British cars, Scotch whisky and biscuits and ceramics cheaper to sell to Australia, and it will be easier for under-35s to travel there to work.

"This free trade agreement is more about symbolism than immediately tangible material benefits", said Ben Wellings, senior lecturer in politics and worldwide relations at Monash University.

Karen Betts, chief executive of the Scotch Whisky Association, said the deal would help producers continue to expand Australia export markets, which have nearly doubled in size over the past decade, but said the industry hoped to get further legal protections.

"Both prime ministers have held a positive meeting in London overnight and have resolved outstanding issues" in relation to the trade pact, Tehan said in a statement.

With reference to the farming industry that had been concerned about greater Australian imports, the government said that British farmers will be protected by a cap on tariff-free imports for 15 years, using tariff-rate quotas and other safeguards.

"Australian producers and farmers will receive a significant boost by getting greater access to the United Kingdom market", Prime Minister Scott Morrison and Trade Minister Dan Tehan said in a statement.

The UK-Australia trade relationship was worth 13.9 billion Euros (US$19.4 billion) past year and is set to grow under the deal, the statement said. The new deal will mean that tariffs on such products are gradually phased out.

The queen is also a monarch of Australia, part of the Commonwealth club of 54 nations.

The agreement will be Britain's first trade deal since Brexit, and comes as London seeks to expand commercial and diplomatic links in the Indo-Pacific region.

Free trade deals aim to encourage the trading of goods, and occasionally services, by making it cheaper.

The agreement paves the way for us to join the Trans-Pacific Partnership, a £9 trillion free trade area home to some of the biggest consumer markets of the present and future. Membership will create unheralded opportunities for our farmers, makers, innovators and investors to do business in the future engine room of the global economy, she said, in reference to the UK's bid to join the CPTPP alliance of 11 Pacific nations from Australia to Mexico.

The UK-Australian deal will give food producers and businesses in each country better access to each other's markets.

"The UK will liberalise Australian imports with 99 per cent of Australian goods, including Australian wine and short and medium grain milled rice, entering the UK duty-free when the agreement enters into force".

A final "agreement in principle" will be published in the coming days, it added.

How will the free trade deal work?

The inclusion of a small business chapter in this agreement will also ensure that the needs of smaller businesses are fully catered for in the years to come.

The free flow of data provisions and the ban on data localisation will allow our SMEs in particular to explore the market without the cost of having to set up servers.

Related:

Comments


Other news