Australian PM goes to Europe. . .
Sandwiched between attending last weekend’s G7 meetings and meetings with Queen Elizabeth and French President Emmanuel Macron, Australian Prime Minister Scott Morrison announced key elements of the Australia-United Kingdom Free Trade Agreement with U.K. Prime Minister Boris Johnson. The deal, which is yet to be formally signed, contains provisions for reducing most tariffs between the two countries over 15 years, mutual recognition of professional credentials across several fields, and increasing the maximum age for citizens undertaking working holiday visas in the other country from 30 to 35.
Who are the biggest winners?. . .
Australian agricultural producers stand to make the biggest gains from the deal, including producers of lamb, beef, sugar, and wine. U.K. tariffs on some Australian agricultural products are currently as high as 80 per cent. Tellingly, the domestic political benefit for Prime Minister Johnson will likely be more than the benefit to the U.K. economy, which is projected to expand only 0.02 per cent from the deal. The U.K., which is Australia’s fifth-largest trading partner, has acted as an initial market of entry for many Australian exporters, which have built a presence in Britain before expanding to markets on the European continent.
Expanding the CPTPP. . .
Earlier this month, signatories of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) announced they had agreed on the U.K.’s bid to begin accession talks to join, which the U.K. sees as a primary target for expanding its free trade network following its withdrawal from the European Union. Some observers hope this move will prompt CPTPP ratification by the four signatories who have yet to do so (Brunei, Malaysia, Chile, and Peru), as only countries that have ratified the deal can participate in negotiations with aspiring members. It is encouraging that the U.K. and Australia, which is a member of the CPTPP, were able to iron out their differences on agriculture in their bilateral deal, which indicates one potential roadblock to the U.K.’s CPTPP membership may be out of the way. There will likely be other roadblocks, however, such as with Canada on dairy issues.
READ MORE
- Australian Broadcasting Corporation: Britain and Australia announce new free trade deal (audio)
- Government of Australia: Australia-United Kingdom Free Trade Agreement
- Sydney Morning Herald: Johnson needed trade deal a lot more than Morrison
