Australia, UK Officials Advance Trade Deal Preparations
Trade and foreign ministers from Australia and the United Kingdom met last week to advance preparations for a bilateral trade deal between their countries, including discussions on the implications of different Brexit scenarios as those negotiations continue between the UK and the European Union.
Australian Trade Minister Steven Ciobo and Foreign Minister Julie Bishop met with their UK counterparts, Secretary of State for International Trade Liam Fox and Secretary of State for Foreign Affairs Jeremy Hunt, respectively.
Ciobo, during his visit to the United Kingdom, also spoke at length over what Canberra is looking to see in a possible free trade agreement (FTA) with London, suggesting that such a deal could include traditional areas such as liberalising goods tariffs and newer topics such as ambitious rules on electronic commerce.
Bishop and Hunt, meanwhile, met on Friday 20 July within the framework of annual joint ministerial talks, which cover areas where the two sides are working to cooperate further, such as foreign policy, trade and investment, defence, and security, among other areas.
Ciobo: “Distinct partnership” could yield key dividends
Speaking at the Australia-UK Leadership Forum last week in London, Ciobo gave some indications of how Canberra would like to see its trading relationship with the UK evolve, and indicated that despite the difficulties seen in the UK-EU Brexit talks, it also provides “the kind of opportunity that so rarely comes to pass.”
Examples he gave as components for an Australia-UK FTA included the possibility of slashing tariffs significantly on key Australian exports, such as wine, which he noted currently face a duty of 32 euros per 100 litres when selling to the European Union. The UK is a key market for Australian wine, and Ciobo said that lowering tariffs on these and other goods could yield benefits for both producers and consumers alike.
He also highlighted the digital economy as a subject where both sides have “shared interests.” Australia is one of the countries backing exploratory discussions among a set of WTO members that could lead to formal negotiations on electronic commerce, and has also indicated an interest in advancing this type of rule-making in its trade accords with individual countries or country groups.
Mining was another area that Ciobo highlighted last week, tying the activity to the production of goods such as clean energy products like wind turbines and electric vehicles, as well as defence products. Given Australia’s wealth in rare earths and lithium, which are essential components for such high-tech goods, he said that working together on mining could prove valuable.
“My message today is loud and clear: when Britain is ready, Australia is keen. Australia was the very first nation to establish a bilateral Trade Working Group, scoping out the parameters for a future trade agreement between Australia and the United Kingdom. We are two nations whose partnership is distinct from any other,” he said.
Preparing for all scenarios
Meanwhile, Bishop said last week that she also discussed with Hunt their continued commitment to putting formal trade negotiations in motion as soon as Brexit occurs, saying that both sides “stand ready to agree a free trade agreement as soon as circumstances allow.”
“At such a critical juncture in global affairs, we believe it is vital for like-minded nations to join together to promote peace and stability to the rule of law, to democratic institutions, to freedoms, to free and open trade, to drive that global peace, stability, and transparency,” she said, highlighting the challenges facing the global economy in today’s geopolitical climate.
She also told reporters in Edinburgh that she and Hunt had discussed what could occur should the UK leave the EU next year without a deal, given the implications not just for negotiating a new trade framework under an FTA, but also what it would mean for trade and investment flows under their existing relationship.
Negotiations between the UK and EU are still ongoing, with the two sides now debating whether a “white paper” that UK Prime Minister Theresa May’s cabinet endorsed outlining the government’s Brexit position on a series of items, including goods and services trade, will be acceptable to the EU given the bloc’s own positions on issues such as access to the single market. (For more on Brexit, see related article, this edition)
“We don’t want a no deal scenario, it would [potentially] cause huge disruption to businesses on both sides of the channel. And we are very working very hard to avoid that. But we also have to recognise that it is a possibility as we get closer and we have to be prepare for it,” Hunt told reporters.
ICTSD reporting; “Australia, Britain ready to agree free trade deal: minister,” REUTERS, 20 July 2018; “UK And Australian Ministers Discuss Post-Brexit Trade Deal,” ALLIANCE NEWS, 20 July, 2018; “Future UK trade deals with Australia, Canada, and New Zealand,” BBC, 18 July 2018; “Brexit: Julie Bishop pledges stronger trade ties with UK, as EU negotiator pokes holes in white paper,” ABC NEWS, 21 July 2018; “ Australia, UK ready to agree on free trade deal: Bishop, ” SBS NEWS, 21July 2018.