The deal is the first bilateral trade accord Britain has negotiated from scratch since leaving the EU last year. The government sees it as an important piece of its post-Brexit strategy to shift Britain’s economic center away from Europe and seek new opportunities in higher-growth Indo-Pacific nations.
Australian Prime Minister Scott Morrison and Johnson overcame sticking points during talks after the Group of Seven advanced economies met in Britain at the weekend. Morrison attended the summit as a guest.
“I think this is important economically, there’s no question about that … but I think it’s more important politically and symbolically,” Johnson said. “We’re opening up to each other and this is the prelude to a general campaign of opening up around the world.”
Prior to Britain joining the then European common market in 1973, Britain was Australia’s most lucrative trading market.
The full agreement is yet to be published. According to British official estimates, it could add 500 million pounds to the country’s economic output over the long term, a small fraction for an economy worth around 2 trillion pounds.
BIGGER PRIZE
The bigger economic prize could be the precedent the deal sets for freer access in trade that allows Britain’s services sector to export financial, legal and other professional services.
“It is a fundamentally liberalizing agreement that removes tariffs on all British goods, opens new opportunities for our services providers and tech firms, and makes it easier for our people to travel and work together,” British trade minister Liz Truss said.
Britain has applied to join a trans-Pacific trading bloc, of which Australia is also a member, that includes other countries where minister predict demand for digital, legal and professional services will grow rapidly.
That deal, Comprehensive and Progressive Agreement for Trans-Pacific Partnership, is also seen as important economic counterweight to China’s influence in the region.
Australian Minister for Trade David Littleproud said Australian farmers would benefit from the deal.
“Overall, this is going to be a great win for Australian agriculture,” Littleproud told 4BC Radio.
A good read.