27 May

'Australia set for free trade talks with UK' Jacquelin Magnay, The Australian

Australia and the United Kingdom will soon begin formal negotiations for a free trade deal.

It is expected that a detailed set of negotiating objectives for a UK-Australia Free Trade Agreement, in addition to a scoping assessment which sets out the potential economic impacts of any agreement, will be published in the coming weeks, and before the formal talks start (remotely).

Officials have told The Australian that the preparations for the formal negotiations are almost complete.

British International Trade Secretary Liz Truss told Westminster last week: ‘’We will shortly be launching negotiations with Japan, Australia and New Zealand, and pressing for early accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. This is an important step in diversifying our trade and making sure we are not just dependent on a small number of countries for our imports and exports. It is also important that we work with like-minded free market democracies to help set global standards in trade.’’

Australia’s High Commissioner to the UK, George Brandis, told The Australian: “We expect the announcement of the commencement of formal negotiations to take place very soon. We are committed to having an ambitious free trade agreement wrapped up at the earliest possible date. Our commitment is to an ambitious, gold standard trade deal that strengthens both our economies and helps create jobs.”

The talks had been expected to have already begun so that a deal could be finalised as the transition period of Brexit finishes at the end of the year, but the timetable has been pushed back because of the coronavirus pandemic which has shut down large swathes of British life.

Senior ministers and bureaucrats from Australia and the UK have been in informal talks since Brexit was concluded to try and iron out prospective hurdles before the objectives are released. Some of these relate to ongoing subsidies for British farmers.

Australia has been in trade talks with the European Union for nearly two years but these talks have been caught up in protectionist issues largely centred around French farmers. The impact of the coronavirus on the EU, and its recent announcement of grants worth 500bn euro to struggling European states could make untangling those protectionist layers more difficult.

It had always been expected that while Australia had started talks with the EU well before the UK, the UK deal would be much easier to sort out.

Last week the UK released its negotiating objectives in a free deal with Japan and last month the UK began formal talks with its big export market, the United States.

However just weeks into the UK-US discussions there are suggestions the talks could result in a ‘’mini deal’’ sorted before the US presidential election in November which seeks to pull the UK closer to the US, and away from China.

Last Tuesday Ms Truss announced the UK would remove all tariffs below two per cent, which will start when the Brexit transition period ends on December 31.

Known as the UK Global Tariff, it is a simple and cheaper model than the EU’s Common External Tariff and will apply to countries with which it has no agreement.

“Our new Global Tariff will benefit UK consumers and households by cutting red tape and reducing the cost of thousands of everyday products,” she said.

Ms Truss has also announced that the UK, in conjunction with other Commonwealth countries including Australia will form a Commonwealth caucus at the World Trade Organisation.

“Commonwealth countries represent a third of delegates to the WTO,’’ she said.

“We can be a real force in making the case for free trade and for small countries not to be overwhelmed by big trading blocs.’’

By Jacquelin Magnay, The Australian

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