Free trade between Australia and the UK is now a step closer following the launch of negotiations via video conference by Australia’s Minister for Trade, who assured aussie farmers that agriculture is a top priority.
After years of preliminary discussions, Australia’s Minister for Trade Simon Birmingham has announced negotiations between the two countries, to officially get underway on 29 June.
It was also unique in that the UK, as a consequence of Brexit, is now on the path to securing trade relationships independently of the European Union (EU) – for the first time in 48 years.
In September last year, Liz Truss, International Trade Secretary, said she expected her Government to complete a wide-ranging trade deal with Australia within months of exiting the European Union.
Simon said in a statement the Federal Government worked hard to ensure “we were well placed to kick-off talks as soon as that was possible”.
“Australia was the first country to establish a trade working group with the UK — in September 2016 — to lay the groundwork for what we hope will be a comprehensive and ambitious free trade deal,” he said.
“Australia is ready to help the UK find new beginnings and in doing so create more opportunities for businesses and innovative industries as we rediscover why we used to trade more with each other — because of the quality of our people and what we produce; and because, when it comes down to it, we can rely on each other when times get tough.”
The UK was the second largest investor in Australia and the second largest recipient of Australian investment in 2019.
According to Simon, it will be a modern agreement with best-practice trade rules on emerging and increasingly important issues, including digital trade and innovation, and will include outcomes that benefit the small and medium-sized enterprises who already sell goods and services between our countries, as well as encouraging more to do so.
Rekindling trade ties with a long-term partner
“Despite our long friendship and the common values that unite us, our two great countries have never before had a free trade agreement,” Liz said in a statement.
When the UK entered the European Economic Community in 1973, the UK went from being Australia’s third largest two-way goods trading partner, to now 12th.
UK companies looked to EU opportunities Simon said in a statement, and UK consumers turned away from Australian produce when high tariffs and low quotas were imposed.
“When Australia and the UK work together, we can overcome great challenges,” Simon said.
“We have done so in response to Covid-19: from cooperation to get our citizens home safe, to working in global forums like the G20 to keep essential goods flowing, and collaboration on medical research as the world continues to work towards a vaccine.”
Simon commented on UK’s relationship with Australia, highlighting the nations shared history, traditions, complementary economies, model of government and legal systems, “not to mention our Ashes rivalry, metaphorically we stand shoulder to shoulder”.
“Why Australia? Why not? Take wine. One in five bottles of wine sold in the UK is from Australia, despite facing a tariff that doesn’t currently apply to European wines,” Simon said.
Simon said London’s global reputation as the financial capital of the world stands to benefit as Australia deepens its links in financial services.
“There is also real potential to grow our wider services trade well beyond the $15 billion of value it generates now,” he said.
Australian Farmers rejoice at free trade talks
Fiona Simson, National Farmers’ Federation President has praised the Federal Government’s focus on the interests of farmers as official negotiations towards a free trade agreement between the United Kingdom and Australia begin.
Simon said securing benefits for Australian agriculture was a top priority when negotiations begin, and as a collective, Australian farmers export about two thirds of what they produce.
“Prior to the UK joining the EU (or European Economic Community, as it was then known), the UK was one of Australia’s principle red meat export markets,” said Andrew McDonald, Chair of the Australia-UK Red Meat Market Access Taskforce.
“Whilst an enduring partner, Australia’s beef and sheepmeat access has been limited by virtue of the UK being a member of the EU.”
Although Coles is a major partner of the National Farmers Federation (NFF) but Fiona said expanded export markets was key to agriculture’s continued growth.
“The UK-Australia FTA represents an opportunity to build on what are already strong trade ties in the region,” Fiona said.
Of critical importance to Australian farmers is the removal wherever possible, of tariffs, quotas and non-tariff barriers.
“The removal of these barriers are necessary to ensure Australian farmers can engage in fair and healthy competition with their UK counterparts,” Fiona said.
Andrew said compared with many other countries supplying the EU, Australia has disproportionately low volume quota access coupled with trade prohibitive above quota tariffs.
“Our industry will therefore be encouraging negotiators from both sides to think beyond the quota and tariff construct the UK has become accustomed to, and embrace the merits of liberalised trade – a regime which is conferring significant benefits to both the Australian red meat supply chain and our international consumer base via the suite of Free Trade Agreements (FTAs) Australia has secured to date,” he said.