United Kingdom agrees first post-Brexit trade deal with Australia

United Kingdom agrees first post-Brexit trade deal with Australia

United Kingdom agrees first post-Brexit trade deal with Australia

The UK-Australia trade relationship was worth £13.9bn ($19.6bn) previous year and is set to grow under the deal.

The deal will be keenly scrutinised by British farmers, who fear they could be forced out of business if the deal eliminates tariffs on lamb and beef imports from Australia.

Australian Prime Minister Scott Morrison and his British counterpart Boris Johnson overcame sticking points during talks after the Group of Seven meeting in Britain over the weekend, which Morrison had attended as a guest.

Number 10 said it would make British cars, Scotch whisky and biscuits and ceramics cheaper to sell to Australia, and it will be easier for under-35s to travel there to work.

According to official statistics, the United Kingdom was Australia's fifth largest trading partner in 2019, with total trade between the United Kingdom and Australia was worth 13.9 billion pounds past year.

The Prime Minister said: "Today marks a new dawn in the UK's relationship with Australia, underpinned by our shared history and common values".

Agricultural producers will also be supported to increase their exports overseas, including to new markets in the Indo-Pacific.

Scotland exported £126m of beverages to Australia in 2020 - this deal will help distillers by removing tariffs of up to 5% on Scotch Whisky.

"This free trade agreement is more about symbolism than immediately tangible material benefits", said Ben Wellings, senior lecturer in politics and worldwide relations at Monash University. Under the new FTA tariffs will be removed and customs procedures will be simplified.

The Queen and other members of the Royal Family had hosted a drinks reception for world leaders at the summit, but as Australia is not in the G7, it was not invited to that part of the day.

Secretary of State for worldwide trade Liz Truss said: "This deal delivers for Britain and shows what we can achieve as a sovereign trading nation".

Foreign Secretary Dominic Raab said on Twitter that the deal is "an important stepping stone" in efforts to join a massive free trade zone in the Indo-Pacific region - the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

Johnson and Morrison, who reached the in-principle agreement over dinner on Monday, are set to formally announce the deal Tuesday morning.

The UK exported 5.4 billion pounds worth of services, including 1.4 billion pounds of insurance and pension services and 780 million pounds of financial services, to Australia in 2020. The estimated impact of the deal on Australia's GDP is somewhere between 0.01% and 0.06%.

As we look beyond the pandemic and enjoy the benefits of post-Brexit growth, deals like this will reap vast rewards to small firms right across the UK.

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