Sun | Jul 25, 2021

Australia, Britain reach free trade deal

Published:Wednesday | June 16, 2021 | 12:09 AM
Prime Minister of Australia Scott Morrison, left, walks with Prime Minister of the United Kingdom Boris Johnson after their meeting, in the garden of 10 Downing Street, in London, Tuesday June 15, 2021.
Prime Minister of Australia Scott Morrison, left, walks with Prime Minister of the United Kingdom Boris Johnson after their meeting, in the garden of 10 Downing Street, in London, Tuesday June 15, 2021.

Britain and Australia announced the broad outlines of a free trade deal Tuesday, eliminating tariffs on a wide range of goods as the United Kingdom seeks to expand links around the world following its exit from the European Union.

The pact is expected to boost exports of traditional British products such as Scotch whisky, while boosting imports of lamb and wine from Australia. Crucially for Britain, it will also reduce barriers to trade in financial and other services. The UK hopes the deal will help it join the trans-Pacific trade partnership, which would open the door to increased trade throughout the Asia-Pacific region.

It is the first trade deal Britain has negotiated from scratch since it left the EU. Earlier deals with countries including Japan and Canada were built on existing agreements struck by the EU.

British Prime Minister Boris Johnson appeared outside his Downing Street office with his Australian counterpart Scott Morrison on Tuesday, to highlight the benefits each country would receive from the deal and stress the long ties between the two nations.

“This is an ambitious free trade agreement,’’ Morrison told reporters. “This is not a standard cookie-cutter agreement. This is an agreement with great ambition for both countries.’’

While both leaders were effusive in praising the benefits of the deal, details were limited. The UK said a final agreement in principle would be published “in the coming days”.

Australia is the UK’s 14th largest trading partner, accounting for £13.9 billion (US$19.5 billion) of exports and imports last year, according to British government statistics. The relationship is even more important to Australia, which counts Britain as its fifth largest trading partner.

Australian farmers may be one of the big beneficiaries of the deal as agricultural goods account for about 14 per cent of the country’s total exports. That has raised concern among British farmers, who fear they won’t be able to compete with cheap imports from Australia, which has different rules on animal welfare and environmental protection than the UK

UK farm groups reacted with caution, saying they were waiting to see the details of the agreement.

“The ultimate test of this trade deal will be whether it contributes to moving farming across the world on to 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,” National Farmers Union President Minette Batters said in a statement.

Johnson defended the deal, saying tariff-free agricultural imports would be capped for 15 years to protect UK farmers. The government also said it would seek to increase agricultural exports to Asia and the Pacific.

“I want everybody to understand that this is a sensitive sector for both sides and we’ve got a deal that runs over 15 years and contains the strongest possible provisions for animal welfare,’’ Johnson said. “But I think it is a good deal, and I think it’s one that will benefit British farmers and British consumers as well.’’

Australia imported £5.4 billion worth of services from the UK last year, making it the 10th largest market for Britain’s service industry. Services account for about 80 per cent of the UK economy.

AP