Advanced Search

Share Coverage



Category: Business, Economics and Finance / World Politics / Agribusiness / International Aid and Trade / Trade

Australia and UK take first step to free trade deal

Wednesday, 7 Sep 2016 05:50:56 | Steve Cannane

Australian and UK leaders have discussed post-Brexit free trade deals. (Facebook: Malcolm Turnbull)

Australia and the UK will establish a bilateral Trade Working Group with the purpose of being ready to fast-track free trade negotiations once Britain formally leaves the European Union.

Key points:

  • Working group will meet twice a year from early 2017
  • 'No country will want to do a deal' with UK until EU trade arrangements are clear, expert says
  • Pressure on UK Government to sign new FTA's quickly could advantage Australia

The working group will meet twice a year from early 2017.

The announcement was made following talks in London between Australian Trade Minister Steve Ciobo and UK Secretary of State for International Trade Liam Fox.

In a joint statement, Mr Fox and Mr Ciobo said: "Both of us want a future FTA (free trade agreement) to generate new trade and investment opportunities. We will prioritise consultation and outreach to our respective stakeholders to seek their input to the work of the Working Group".

British Prime Minister Theresa May has used Australia as an example of one of the nations keen to strike a free trade deal with the UK post-Brexit.

But the reality is it could be years before any deal is done.

UK under pressure to sign FTAs quickly

First of all, Britain has to agree to trade arrangements with the European Union.

"No country will want to do a deal with the UK until that's clear," said Guy de Jonquieres a world trade expert and fellow with the European Centre for International Political Economy.

Once Britain leaves the EU, and has trade arrangements with the 27 countries in the bloc, its likely there will be a number of sticking points for any deal between Australia and the UK.

At the moment farmers in the UK are the beneficiaries of generous subsidies courtesy of the EU's Common Agricultural Policy. The subsidies account for nearly 40 per cent of the EU's budget.

The UK Government has agreed to maintain these payments up until 2020, but after that they could become a pressure point under any free trade deal with Australia.

Many British farmers voted to leave the EU, yet want the subsidies to remain.

The UK Government will be under domestic political pressure to sign new FTAs quickly and this could advantage Australia, Mr de Jonquieres said.

"The UK not only wants to increase market access around the world, it wants to show people at home and abroad it can do these deals," he said.

"There is a danger they could rush for that reason into bad deals."

Australia has another advantage up its sleeve.

Over the last few years its negotiators have been busy sharpening their skills doing deals with the likes of China, South Korea and Japan.

All of the free trade deals involving the UK market have been in the hands of EU negotiators. The Brits will suddenly have to find around 300 trade negotiators out of nowhere.

Who knows, they might even start poaching Australians.

AustraliaPlus


 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend