Boris Johnson, U.K. prime minister and Scott Morrison, Australia’s prime minister, gave a joint news conference during their bilateral meeting in the garden of number 10 Downing Street yesterday.
A final agreement in principle will be published in the next few days.
“Today marks a new dawn in the UK’s relationship with Australia,” Johnson said. “Our new free-trade agreement opens fantastic opportunities for British businesses and consumers.”
The Australia deal is expected to boost the size of the UK economy by 0.02% over 15 years.
Australia is the UK’s 20th-largest trading partner globally. Trade with Australia made up 1.2% of Britain’s total trade in 2020.
The agreement will cut tariffs on products like Scotch whisky, clothing and cars. It will also reduce levies on agricultural products.
British farmers have raised concerns that they would be undercut by cheap meat imports from Australia.
There will be a cap on tariff-free imports for 15 years, using tariff-rate quotas and other safeguards.
Britain’s next trade deals are likely to be with New Zealand and the USA. The British government also sees the Australia accord as a stepping-stone to joining the CPTPP, an 11-country pact that includes Singapore, Malaysia and Japan.
For Australia, the agreement would be the latest in a string of bilateral free-trade deals signed in the past decade with nations including Japan, South Korea and Indonesia, as well as with the CPTPP. It’s also in negotiations to join a pact with the EU.
Morrison has been encouraging exporters to diversify into more markets after geopolitical tensions with Australia’s largest trading partner, China. These spilled into trade reprisals, including tariffs on barley and wine, and coal shipments blocked at Chinese ports.
[Photo: Luke MacGregor/Bloomberg]