Australia and the UK agree a trade deal. But what will this mean?

By Thomas Judge

SINCE the advent of Brexit, its biggest proponents have always touted the striking of new trade agreements as a significant advantage of being outside the EU single market.

Now, the government has revealed the “agreement in principle” of the first major deal struck with Australia. 

The deal, in principle, removes tariffs on goods and services between the two countries – with some exceptions – to make trade flow easier. However, in the end, it seems to amount to very little.

Professors of International Politics and International Economic Law Tony Heron and Fiona Smith, of the University of York and the University of Leeds, respectively, write on the subject in a co-authored blog.

They concur that any consumer benefit will be unlikely: “The free-trade faction in cabinet, led by Truss, are fond of being described as the ‘Lidl free traders’, because of their belief that free trade will not only increase consumer choice but reward Conservatives voters in ‘Red Wall’ constituencies with cheaper food prices. This outcome seems unlikely in the case of Australia, given that even large tariff reductions rarely have a discernible impact on consumer prices.”

There are also some minor relaxations of immigrations rules between the two countries.  The Youth Mobility Visas – designed for anyone under 35 to live in Australia for three years – potentially being relaxed by Australia. 

However, a key sticking point coming up before the announcement of details was around agriculture. Many, including the National Farming Union, had vocal reservations about a free trade agreement with Australia.

The NFU is potentially against such a deal because Australia has much lower standards and practices regarding animal welfare. If Australian farms flooded the UK market with cheaper meat, it could decimate the British Farming industry. However, the details revealed seems to give a glimmer of hope that this will not be the case. 

Although the free trade of goods is the main thrust of the agreement, the UK will apply some caveats to meat entering the UK. There will be a fifteen-year buffer period between when both governments formalise the deal and all tariff-free quotas disappear entirely, with a transition period in the last five of these years.

In a statement released by the NFU, their president Minette Batters said: “While details remain very thin on the ground, it appears that the agreement will include important safeguards that attempt to strike a balance between liberalising trade and supporting UK farm businesses, as well as a reasonable time period to allow UK farmers to adjust to the new trading environment.”

A cautious but perhaps optimistic tone that the agreement won’t be doomsday for UK farming after all.

However, she remains sceptical, continuing to say: “I am concerned that today’s announcement appears to have made no mention of animal welfare and environmental standards”.

Furthermore, many fear that this is still the beginning of the decimation of British farming, just done in slow motion. On top of this, further trade deals with countries like Brazil and the USA might further exacerbate pressures on small and medium-sized farms as free trade agreements begin to stack up.

On the other hand, some doubt the effect Australian meat entering the UK market will have. There are already quota’s set up for the amount of meat from Australia allowed into the country, which exports to the UK have not met since their introduction. With savings for the British public on this meat being so limited, the potential flooding of the market might never actually come to fruition.

Of course, a trade deal such as this isn’t just about making existing trade more effortless but also encouraging trade between the two nations. Again, however, many would point out that trade will never be massive between two countries that are a world apart. 

In a way, the first significant trade deal potentially being struck with Australia plays well into many post-Brexit fantasies of reconstructing some form of the British Empire, and is more a victory is rhetoric than anything else.  

Perhaps this will pave the way for the mythical CANZUK (Canada, Australia, New Zealand, and the United Kingdom) agreement to be brought closer to reality.

A proposed trading union similar to the ECC between the white English speaking parts of the former Empire. For now, however, the deal struck seems to be more about the Conservative party claiming a win rather than actual growth in UK GDP or added prosperity.

Featured Image: Pixabay

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