British Prime Minister Boris Johnson said the deal marked a “new dawn” in relations between the UK and its former colony.
The UK and Australia announced a new trade deal on Tuesday, the first such deal the UK has negotiated from scratch since leaving the European Union.
The pact, which will eliminate tariffs and red tape, has been hailed by British Prime Minister Boris Johnson as “a new dawn” in relations between the two countries.
Johnson’s Conservative Party government sees the deal as an important part of its post-Brexit strategy to move the country’s economic hub away from Europe and seek new opportunities in the higher-growing Indo-Pacific countries.
Previous agreements with other countries, including Japan, were based on existing agreements reached by the bloc of 27 members.
Australian Prime Minister Scott Morrison and Johnson overcame sticking points in discussions after the G7 meetings in the UK, which Morrison attended as a guest.
The UK said the deal would mean products such as cars, Scotch whiskey, cookies and ceramics would be cheaper to sell to Australia, a former British colony.
It will also allow UK citizens under 35 to travel and work in Australia more freely.
In the other direction, the agreement will eliminate tariffs on Australian products such as wine, swimwear and confectionery imported into the UK.
“Today marks a new dawn in UK relations with Australia, supported by our shared history and common values,” Johnson said in a statement.
“This is global Britain at its best – looking outward and making deals that deepen our alliances and help ensure every part of the country rebuilds itself better after the pandemic. “
Foreign Minister Dominic Raab tweeted that the deal is “an important stepping stone” in efforts to join a free trade area in the Indo-Pacific region – the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership.
Congratulations @trussliz. Ideal for securing a win-win FTA with our Australian friends, which is also an important stepping stone towards the CPTPP – both opening up huge opportunities in the Indo-Pacific. #GlobalBritain https://t.co/nwjt4KS86G
– Dominic Raab (@DominicRaab) June 15, 2021
The UK is Australia’s eighth-largest trading partner and Australia’s 20th-largest, with two-way trade worth A $ 26.9 billion ($ 20.7 billion).
Before the UK joined the then European Common Market in 1973, it was Australia’s most lucrative commercial market.
While further details on the deal have yet to be released, some official estimates indicate that the deal could add £ 500million ($ 705.7million) to Britain’s long-term economic output – a fraction for an economy worth about two trillion pounds ($ 2.8 trillion).
The deal will be scrutinized by British farmers, who fear being forced into bankruptcy if the deal eliminates tariffs on imports of lamb and beef from Australia.
The UK said UK farmers would be protected by a cap on duty-free imports for 15 years, using tariff quotas and other guarantees.
Australian Trade Minister David Littleproud told 4BC Radio that the deal marked a “victory for Australian agriculture”.
The Australian economy, however, is already oriented towards Asia.
“This free trade agreement is more about symbolism than immediately tangible material benefits,” said Ben Wellings, senior lecturer in politics and international relations at Monash University.