Australia, UK Explore Options to Deepen Trade Ties

26 January 2017

Exploratory discussions between the UK and Australia for a post-Brexit trade deal are expected to continue this week, media reports suggest, with some officials noting that migration will likely be an area of interest during the talks.

The two sides already confirmed late last year their plans to establish a working group to begin scoping out options for a future bilateral free trade agreement (FTA) once the UK exits the EU. (See Bridges Weekly, 7 September 2016)

According to Alexander Downer, Australia’s High Commissioner to London, Canberra’s substantive expectations for the potential FTA with London will include a more relaxed immigration deal for Australian workers.

“We would want to see greater access for Australian businesspeople working in the UK and that’s often been a part of free trade negotiations – it hasn’t always been by the way, but it’s often been part of our free trade negotiations,” Downer told BBC Radio 4’s Today programme.

In terms of present immigration rules, Australians entering the UK for work must obtain a tier two visa, which allows them to stay in Britain for a maximum of five years and 14 days. In order to qualify for this visa, Australians must have a skilled job in the UK, a certificate of sponsorship from their employer and a minimum of £945 (€1108 at today’s exchange rates) in savings.

Furthermore, Australians need to demonstrate that they will be earning an “appropriate” salary, which is usually at least £25,000 (€29,308 at today’s exchange rates), or the appropriate rate for the job offered.

Downer has suggested that an agreement could be reached equally quickly with the UK, though this will depend on its structure, content, and approach. Downer said that Australia has already provided the UK with a scoping paper on possible FTA parameters.

Deepening ties

Australian Treasurer Scott Morrison stated in a media release that “as trading nations, [Australia and the UK] have both benefited from globalisation. Indeed, Australia’s total trade with the UK was worth around A$27 billion in 2015-16, with Australian exports worth around A$12 billion and our imports from the UK around A$15 billion.”

Morrison will be among the officials in the UK this week for trade and investment-related discussions.

UK Prime Minister Theresa May reaffirmed this week that boosting trade ties with Australia is among her government’s priorities, describing the Oceanic nation as one of the key players in its “outward-looking” post-Brexit trade agenda.

May has emphasised on various occasions that the UK purports to be a global leader in free trade, telling an audience at the World Economic Forum’s Annual Meeting in Davos that her government will be seeking new trade deals with various other international partners.

Australia has also committed to lending knowledgeable trade experts to facilitate the UK’s post-Brexit trade negotiations, considering that the UK’s trade policy has been conducted by the EU for decades.

Lord Price, who serves as the UK’s Minister of State at the Department of International Trade, said in November that “the UK and Australia share a strong commitment to global trade liberalisation and we will continue to work with other like-minded partners to be at the forefront of championing the global benefits of open markets and free trade.”

While the UK cannot finalise any foreign trade deals until after the Brexit talks are completed, officials suggest that such exploratory discussions can help ensure a prompt transition into post-Brexit bilateral agreements with selected international partners.

ICTSD reporting; “Australia to seek UK migration deal in Brexit trade talks,” THE GUARDIAN, 21 January 2017; “Australian negotiators arrive to begin post-Brexit trade talks,” THE TELEGRAPH, 8 October 2016; “Commission warns UK: Keep trade talks informal,” POLITICO, 23 January 2017; “Australia to open trade deal talks with UK ahead of Brexit,” IRISH TIMES, 22 January 2017.

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