CNN – Australia and the United Kingdom announced a free trade agreement on Tuesday as Britain begins to forge new economic relations after leaving the European Union.
The main elements of the deal were agreed by British Prime Minister Boris Johnson and Australian Prime Minister Scott Morrison at a meeting in Downing Street on Monday evening. The agreement in principle will be published in the coming days.
This is the first major bilateral free trade agreement negotiated by the United Kingdom since leaving the European Union in January 2020. Britain has also concluded agreements with Japan and Norway, but they were based on existing agreements negotiated by the European Union.
The UK’s ability to negotiate its own trade policy has been touted by the government as a major benefit of Brexit. And he’s moving forward with the deal with Australia despite opposition from UK farmers and other food and drink producers who fear the deal will allow cheap imports and set a dangerous precedent. .
“We are concerned that the pace of these negotiations, in particular the free trade agreement with Australia, may be too rapid and provide the opportunity for proper consideration and consultation,” said representatives of the United States. Scottish agriculture, supply chain and food industries in a recent open letter.
“The risks here are enormous for the entire food and beverage supply chain and, in the absence of any formal impact assessment to suggest otherwise, we remain extremely concerned about the impact on sensitive sectors of our industry, ”they added.
A spokesperson for Morrison said the countries intended to finalize the new free trade agreement by November and enact it by July 2022. The agreement “is a victory for jobs, business, free trade and highlights what two liberal democracies can achieve by working together. ” added the spokesperson.
But the economic impact of Britain’s deal with Australia is likely to be small, according to Mark Melatos, associate professor of economics at the University of Sydney.
The UK Department for International Trade said in July 2020 that a zero-tariff trade deal with Australia is expected to increase UK GDP by 0.02% over the next 15 years. The department acknowledged that “Australia has a strong comparative advantage in its cattle meat exports” and may be able to supply UK retailers “at a lower cost than domestic producers”.
Melatos said any concessions on agriculture would likely be phased in over a long period of time and would likely include safeguards to protect farmers from undercutting cheap imports into the UK.
“I think the thing to watch out for are the mentioned concessions on human movement between the UK and Australia, including relaxing visa requirements for travel and mutual recognition of professional qualifications,” he said. -he declares.
The UK struck a deal late last year with the European Union that established new trade rules that fall far short of the benefits of EU membership. Britain has also negotiated with the United States on some issues – including the suspension of certain tariffs – but a broader deal with Washington remains elusive.
– Simran Vaswani and Hanna Ziady contributed to this report.