On June 15, the U.K. and Australia announced a free trade deal. The British government hailed it as an essential step in building new trade relationships following its exit from the E.U.
According to the U.K. government, the free trade agreement suggests it will cost less for British businesses to sell products such as cars, confectionery, and Scotch whisky into Australia. The deal removes tariffs and reduces red tape.
The deal is the first bilateral trade agreement Britain has negotiated from scratch since leaving the European Union in 2020. The government sees it as an essential piece of its post-Brexit strategy. They intend to shift Britain’s economic center away from Europe and seek new opportunities in higher-growth Indo-Pacific nations.
Britain added that the move would increase U.K. industries that employ 3.5m people across the country.
U.K. Prime Minister Boris Johnson announced that the new free-trade agreement opens fantastic opportunities for British businesses and consumers, as well as young people wanting the chance to work and live on the other side of the world.
The deal was flagged late Monday when Australia’s minister for trade announced Johnson and his Australian counterpart Scott Morrison had agreed to the broad terms of the agreement over dinner in Downing Street in London.
The deal removes tariffs on 4.3 billion pounds, which equals $6.06 billion, of British goods exports. Due to this, it will be cheaper for the U.K. to sell cars and Scotch whisky to Australia.
Britain has announced its deal will also benefit trade in services by cutting red tape. British and Australian firms will also find it easier to bid for procurement projects in each country.
What’s in the new trade deal?
Australia will receive large quotas for tariff-free shipments of beef and lamb into the U.K.
The deal currently means Australia can greatly ramp up its exports of red meat before tariffs become an issue.
According to Australian government data, Australia will be given immediate access to a duty-free sheep meat quota of 25,000 tonnes when the deal starts – far above shipments to Britain of 7,788 tonnes made in 2019.
British under the age of 35 will find it easier to work in Australia for up to three years under the new deal. Meanwhile, British lawyers will be able to practice there without needing to retrain.
The U.K. has applied to join a trans-Pacific trading bloc. Australia is also a member, including other countries where ministers predict demand for digital, legal, and professional services will grow rapidly.