London/Canberra: – The United Kingdom and Australia have signed a historic free trade agreement. It is said that the deal is expected to boost trade between the two countries by more than $13 billion. This is the first free trade agreement proposed and achieved by the United Kingdom since its withdrawal from the European Union. Australian Prime Minister Scott Morrison has said that the deal ‘strengthens’ the special relationship with the United Kingdom. Analysts say the deal comes as a relief for Australia against the background of the ongoing trade war with China.
The agreement was signed by British Trade Minister Anne-Marie Trevelyan and Australian Minister Dan Tehan at a ‘virtual’ event on Friday. High Commissioners and senior officials of both countries were present on occasion. Under the new agreement, the two countries will abolish tax on more than 90% of exports. The regulations for the service sector have been simplified and the process of issuing visas to citizens below 35 years has also been simplified. The two countries have also agreed to prioritise each other’s companies and investors. Exports of British cars, biscuits, ceramics and liquor to Australia will be easier and cheaper soon.
Taxes on metals, machinery, and agricultural products, exported from Australia to the United Kingdom have also been reduced. Bilateral trade between the United Kingdom and Australia reached GBP 20 billion ($28.3 billion) in 2020. These mainly include metals, medicines, cars, machines and wine. According to data released by the British Department of Commerce, a free trade agreement with Australia is expected to boost British exports by nearly $1 billion. The media has claimed that the agreement with the United Kingdom has freed Australian farmers from the restrictions and rules imposed by the European Union.
British Prime Minister Boris Johnson had announced ‘Global Britain’ when the United Kingdom left the European Union. The primary purpose is considered ‘to strengthen the British position in the international trade and strategic arena.’ As part of that, the United Kingdom indicated that it would prioritise the Indo-Pacific region in its foreign policy.
The signing of a free trade agreement with Japan is the first step in that direction. The United Kingdom has since announced its participation in the 11-nation CPTPP, a multinational trade agreement. The announcement was followed by moves for signing trade agreements with major countries like India and Australia. Trade agreements with both Japan and Australia are expected to facilitate the inclusion of the United Kingdom into the multinational trade agreement CPTPP.
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