Scotch whisky, British cars, biscuits and ceramics will become cheaper in Australia thanks to a new free trade agreement. This is the first trade agreement to be fully completed by the United Kingdom after its exit from the European Union at the beginning of this year.
British Prime Minister Boris Johnson and his Australian counterpart Scott Morrison agreed on the most important points in London on Monday evening. The first results were announced on Tuesday, and the full treaty will be published later.
Johnson said of the agreement: “Today marks a new day in our relationship with Australia, which is underpinned by our shared history and values.” “This is the largest and most ambitious treaty Australia has ever signed with another country,” Morrison said.
Import duties have been reduced
Both countries reduce all types of import taxes on each other’s products. This would stimulate exports, create additional job opportunities and enhance economic growth. Last year, the value of two-way trade amounted to about 14 billion pounds sterling, or more than 16 billion euros.
It will be easier for Australia to sell things like wine, sweets and swimwear in the UK. According to calculations, lower import taxes would save British households £34 million a year.
Another example is exporting from Northern Ireland to Australia. 90 percent of this relates to machinery and goods used in the Australian mining and recycling sector. To this end, import duties were abolished and customs procedures were simplified.
British farmers criticized the trade agreement in advance, because their Australian colleagues had to adhere to less stringent welfare requirements. The agreement now protects British farmers from cheaper Australian products for fifteen years.
The entry gate
The British government also promised to help its farmers export to other markets around the Indo-Pacific. The UK wants to use a free trade agreement with Australia as a gateway to that region and join a key trading bloc, the Trans-Pacific Partnership. Eleven countries with a total of £9 trillion of GDP are participating, including Australia and Mexico.
Many British industries are suffering from Brexit. Instead of the smooth trade flows that the EU and UK previously enjoyed, trade barriers have been added, such as additional paperwork. Due to the trade agreement with the European Union, which was concluded in time in December, import duties usually do not have to be paid.
Global Britain is the term used by the United Kingdom to indicate its ambition to restore trade relations. Before Britain joined the European Economic Community in 1973, Australia was the British’s most profitable trading partner.
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