A Free Trade Agreement with the UK will Boost the Australian Economy
In a speech at Greenwich on Monday the British Prime Minister told the world that the UK will be a world leader in free trade. In answer to questions from journalists he said that a free trade agreement with Australia was one of the top four priorities along with agreements with the EU, the US and Canada.
In describing the sort of agreement he wanted to have with the EU he said his preference was for an Australian style free trade agreement He also announced that the agreement with Europe will be based on duty free and quota free movement of goods between the two parties. If this applied to Australia it would mean a reversion to the arrangements that existed between the two countries prior to Britain’s membership of the EU in the early 1970’s.
An analysis of Australian British trade in the 70’s with now makes interesting reading. In 1972 we exported 103,000 tonnes of beef to Britain compared with 4,000 tonnes in 2018/19; 27,000 tonnes of sheep meat compared with 8,000 tonnes now; 32,500 tonnes of butter compared with nothing now; 415,000 tonnes of sugar compared with nothing now and 520,000 tonnes of wheat compared with 7,000 tonnes now.
Boris Johnson said that “Prime Minister ScoMo phoned me on Friday saying he was ready to get on with it (the FTA)”. Australian Trade Minister, Simon Birmingham, has said that Australia wants the agreement concluded by the end of the year. In line with this timetable the British Foreign Secretary, Dominic Raab, is in Australia at the moment to discuss a timetable for trade negotiations. In the meantime Australian trade negotiators have been based in London and are ready to begin discussions.
Apart from the better access for Australian goods in the UK market, Australia will benefit from opening up its services market to competition from UK financial services companies, particularly banks. At the moment the banking and insurance sectors are dominated by a small number of large institutions. Competition from British banks and insurance companies will increase liquidity, lower prices and increase efficiencies in the Australian financial sector.
There will also be greater opportunities for Australian technology in areas such as medical devices and pharmaceuticals which will have access to procurement by the National Health Service. It will probably also lead to greater t co-operation between Australian and British research organisations.
Simon Birmingham recently wrote an article in ‘The Australian’ in which he said:
“Australia is at or near the very front of the queue as Britain prioritises its major trade deals.
“We have already settled some agreements with the UK that will come into operation on 1 January, 2021. These will ensure continuity of co-operation on nuclear issues, access for Australian wines and mutual recognition of certain standards.”
Moreover as Boris Johnson pointed out the free trade agreement will not include provisions on the environment or labour market standards, which are issues being raised by the EU in their FTA negotiations with Australia.