UK and Australia Agree on Post-Brexit Free Trade Agreement

The United Kingdom and Australia have agreed to the general terms of a free trade agreement that is expected to become a model for Britain’s post-Brexit trade policy.

Prime Ministers Boris Johnson and Scott Morrison are set to announce the agreement in principle on Tuesday despite concerns raised by farmers in both countries about the elements of the agreement.

British farmers are afraid Concessions allowing the import of Australian beef, lamb and sugar free of duties and quotas would seriously damage the local agricultural sector. They are also concerned about welfare standards in Australia, including the use of hormones by some beef producers.

Meanwhile, farmers in Australia have warned that proposals to exempt British backpackers from having to do farm work when renewing their visas will exacerbate a labor shortage, devastating the sector.

Johnson and Morrison negotiated General terms of the agreement During dinner in Downing Street on Monday night, allowing the official announcement to go ahead, officials told the Financial Times.

“The two prime ministers had a positive meeting in London last night and resolved the outstanding issues regarding the FTA,” a spokesman for Dan Tehan, Australia’s trade minister, said on Tuesday.

Their deal is a win for jobs and companies [and] Free Trade highlights what two liberal democracies can achieve while working together.”

If the trade deal can be signed before the end of the year, it would be the first major bilateral agreement fully negotiated by the UK since it left the European Union in January 2020. Deals have been announced with Japan And the Norway They are built on existing arrangements that were negotiated when the United Kingdom was a member of the European Union.

Mark Milatos, associate professor at the University of Sydney, said the Australia agreement was important for the UK, but a double-edged sword.

On the one hand, it shows that the UK can strike bilateral trade deals after Brexit, albeit with a very close friend, Australia. This is important for political optics.

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On the other hand, this deal sets a precedent for later, and possibly more complex, deals negotiated by the UK. Any concessions now granted to Australia will form a baseline for starting future negotiations with the US, EU, etc.”

The Australian Agricultural Company, the country’s largest beef exporter, forecast a rise Beef exports increased tenfold to the UK if a zero-tariff deal is agreed.

But Australian farmers have raised objections to a British demand to scrap the requirement that backpackers in the UK work at least 88 days on farms to extend working holiday visas.

Australia’s agriculture minister, David Littleproud, said on Tuesday that Canberra would introduce mechanisms to replace the nearly 10,000 British backpackers working in the Australian farm sector with alternative labour, if needed under the trade deal.

The government estimated that a free trade deal with Australia would be worth an additional 0.01-0.02 per cent of GDP over 15 years, or £200 million to £500 million more than 2018 levels.

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