UK, Australia sign deal forecast to create 10 billion pounds in extra trade -Breaking
Kirsty and William James
LONDON/SYDNEY – Australia and Britain signed a bilateral free trade agreement on Thursday. It is expected to increase bilateral trade by more than 10 billion pounds (or $13.3 billion). The free trade agreement will eliminate tariffs, open up agricultural sectors and allow for free movement of service sector professionals.
Exporters affected by Chinese sanctions will be able to shift to Britain with the elimination of tariffs for Australian wine and a tariff-free beef quota. Australia will gradually eliminate tariffs for British cars and whiskey as well as confectionary and cosmetics.
Australia’s Prime Minster Scott Morrison, and Dan Tehan, the Trade Minister said that “this is the most extensive and ambitious free trade deal Australia has signed other than with New Zealand.”
China is Australia’s most important trading partner. But, Beijing placed sanctions on an array of Australian agricultural products in response to a diplomatic dispute. The Morrison government urged exporters to decrease their dependence on China.
Morrison stated that the agreement with Britain would create new opportunities for young workers and businesspeople and strengthen our special relationship.
A total of 99% Australian products will be exempted from tariffs when they are exported to Britain. The goods were valued at A$9.2 Billion ($6.60 Billion). A$43 M in duties was removed from Australian wines.
A 35,000-ton tariff-free initial quota of beef from Australia will result in the removal of all tariffs within 10 years.
British firms will be encouraged and supported to invest in Australia. The working holiday programme for Australians 35 and below is expanding to enable them to stay in Britain for three consecutive years.
Britain’s independent analysis found that the plan would help to boost the economy and increase imports and outbound trade by 10.4 billion pounds by 2035.
The total goods and services trade between Australia and Britain was 14.5 billion Pounds in the 12 months to June 2021. Australia was ranked as Britain’s 21st largest trade partner, accounting for 1.2%.
While the agreement does not contribute to Britain’s estimated $3 trillion in economic output, it marks the first London-negotiated trade deal since the EU’s dissolution.
Anne-Marie Trevelyan, British Trade Minister, stated that “This is only the beginning as we get onto the front foot” and take advantage of the opportunities on the global stage.
Britain regards the deal as a major step in its quest to join a trans Pacific trade bloc. It would allow Britain to shift its economic focus away from Europe towards more developed economies that are hungry for professional services.
Two nations signed the Indo-Pacific security agreement, Aukus, in September with the United States. It allowed them to share technology and defence technologies, such as nuclear submarines, with Australia.
British farmers objected to the announcement of principle in principle earlier this year. They claimed it would expose them to large-scale Australian meat production companies that might threaten home-grown produce. Britain claims the agreement has protections for farmers.
Australian sugar, Australian sheep meat, and beef will all benefit from the initial tariff-free tariffs. All tariffs are removed after eight years and ten years, respectively.
British parliament will scrutinize the final terms of this deal. The ability to block an agreement indefinitely by lawmakers is theoretically possible, however, this power was never tested according to the House of Commons Library briefing.
($1 = 0.7502 pounds, 1.3931 Australian dollars)