Britain and Australia on Tuesday announced a free trade deal which the British government described as an important step towards building new trade relationships following its departure from the European Union (EU).
By its projection, the British government believes that cars, Scotch whisky and confectionery would be cheaper to sell in Australia because of the agreement, which removes tariffs and reduces red tape.
This is even as the Australian government said the deal was a “great win” for Australian agriculture.
According to a news report by Reuters, the Tuesday deal is the first bilateral trade accord Britain has negotiated from scratch since leaving the EU last year and 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 his UK counterpart, Boris Johnson overcame sticking points during talks after the Group of Seven (G7) advanced economies met in Britain at the weekend and decided to expand climate insurance
Commenting, the British Prime Minister enthused: “I think this is important economically, there’s no question about that … but I think it’s more important politically and symbolically. We’re opening up to each other and this is the prelude to a general campaign of opening up around the world.”
In his remarks, the Australian leader said: “This is the most comprehensive and ambitious agreement that Australia has concluded.”
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).
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.
Speaking on the bi-lateral deal, British Trade Minister, Liz Truss, said: “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.”
Similarly, 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”, the minister told 4BC Radio.