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by Jack Thomson
21 June 2021
In context: The UK-Australia trade deal

Picture: Shutterstock

In context: The UK-Australia trade deal

A trade deal between the UK and Australia has been agreed, following a meeting between Prime Minister Boris Johnson and his Australian counterpart Scott Morrison in Downing Street early last week.

It was hailed as a “new dawn” in the relationship between the two countries and is the first major trade deal negotiated from scratch since leaving the European Union.

How will the deal work?

A free trade deal aims to encourage trade between countries by making it cheaper. This deal will eliminate tariffs on goods and the UK Government said it will mean products such as cars, whisky, biscuits and ceramics will be cheaper to sell into Australia. 

Downing Street also said farmers will be protected by a cap on tariff-free imports for 15 years, using tariff rate quotas and other safeguards. It hopes to support agricultural producers to increase their exports overseas, including to new markets in the Indo-Pacific. 

Tariff-free trade should make it easier for farms in Australia to export products to the UK and likewise should allow British farmers and companies the same access to the Australian market. 
The UK-Australia trade relationship was said to be worth around £13.9bn last year and the UK Government wants this to grow under the deal, creating opportunities for businesses and producers. Additionally, Brits under the age of 35 will be allowed to travel and work in Australia more freely under the agreement.

What is the background?

The UK Government has already signed a number of trade deals over the past year, but they were rollovers of those the UK already had as part of the EU.  

Agreeing its own deals globally is one of the clear benefits of Brexit in the eyes of the government, and with the Australia deal being the first big one negotiated from scratch, it is a significant political moment for Boris Johnson. 

Johnson said it marked “a new dawn in the UK’s relationship with Australia, underpinned by our shared history and common values.” He went on to say: “This is global Britain at its best – looking outwards and striking deals that deepen our alliances and help ensure every part of the country builds back better from the pandemic.”

The leaders also reaffirmed the nation’s partnership with Australia during talks and the government said they have agreed to work closely together on defence, technology and tackling climate change.

Does everyone support it? 

Simply put, no. After it was revealed that Johnson had agreed a deal with Australia, the SNP said there were “serious concerns” over the potential impact on farmers and crofters. 

Deidre Brock MP, the party’s environment, food and rural affairs spokesperson at Westminster, said the interests of Scottish farmers had been “completely sidelined” throughout negotiations and said Scotland had been “kept in the dark” over the deal. 

The SNP is concerned that there may not be meaningful protections to prevent farmers being undercut on the price and standards of beef, lamb and other produce. 

Major worries have also been expressed by NFU Scotland. The organisation believes it will provide Australia with unfettered access to UK food and drink markets without proper parliamentary scrutiny. It said the process in agreeing the deal sets a “dangerous precedent” for future trade deals, claiming that the cumulative impact of such deals on farmers and crofters would be substantial.

What have people said about it?

The UK Government is clearly thrilled about it, which is to be expected. Liz Truss, Secretary of State for International Trade, said: “This deal delivers for Britain and shows what we can achieve as a sovereign trading nation. 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.”

The support was echoed by Mike Cherry, national chair of the Federation of Small Businesses, who said: “A trade deal with Australia will come as great news for many of our members who have long been exporting there as well as those who are hoping to expand their trade ambitions. As we look beyond the pandemic and enjoy the benefits of post-Brexit growth, deals like this will reap vast rewards to small firms right across the UK.”

However, Martin Kennedy, NFU Scotland president, said: “As detail on the proposed terms of agreement around an Australian trade deal emerge, deep concerns will remain about its impact on Scotland’s farmers, crofters and our wider food and drink sector.

“Under the proposed deal, there is to be a cap on tariff-free imports from Australia for 15 years.  That is merely a slow journey to the Australians getting unfettered access to UK markets and with no guarantees that the promises of other safeguards will address the fact that very different production systems are permitted in Australia compared to here in the UK.”

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