UK, Australia Begin Scoping Future Trade Deal Options
The UK and Australia announced on Wednesday that they are establishing a working group to explore the possible options for a future bilateral trade pact, which the two sides would then begin negotiating if and when London completes negotiations for leaving the European Union.
“We want the Working Group to advance an agenda that will ensure the expeditious transition to FTA negotiations when the UK has formally completed its negotiations to exit the EU,” said Australian Trade Minister Steven Ciobo and UK Secretary of State for International Trade Liam Fox in a joint statement.
The news comes fast on the heels of a bilateral meeting between the prime ministers of the two countries, who discussed ways to deepen their economic relationship on the sidelines of the G-20 leaders’ summit in the Chinese city of Hangzhou. (For more on the G-20 summit, see related story, this edition)
Speaking in Hangzhou, Australian Prime Minister Malcolm Turnbull referred to the 23 June referendum in the UK in favour of leaving the European Union as a “momentous and historic choice.” Both Turnbull and his UK counterpart, newly-minted Prime Minister Theresa May, referred to discussions they had held over a future free trade arrangement as a natural step, given their shared history.
“As you say the bonds between our two countries are longstanding and extremely close,” said May. “I think we have a real opportunity.” She also pledged that the “Brexit” referendum, despite concerns raised by many to the contrary, does not mean that the UK will be “inward looking” going forward.
“In fact we want to be even more outward-looking around the whole of the world and obviously Australia, with our longstanding ties and our close relationship will be one of the first countries we’ll be looking to,” said the UK premier.
The UK prime minister has already indicated her country’s interest in pursuing deeper trade ties with other countries, once the “Brexit” process is fully completed and the UK is no longer an EU member.
Preparations continue for EU trade talks
The launch of this scoping process comes as Australia also prepares for the potential kick-off of FTA negotiations with the EU overall, an objective supported by both sides. (See Bridges Weekly, 19 November 2015)
In a separate media release from his office, Ciobo flagged both potential trade deals as opportunities to support increased investment flows to and from Australia as well, given that both the UK and EU are significant sources of foreign direct investment for the Oceanic nation.
“An Australia-EU FTA will drive growth with a key trade and investment partner. It will also attract increased investment, creating more local jobs as European businesses look to Australia as a gateway to Asia,” said Ciobo.
The EU ranked as Australia’s third largest trading partner in 2015, while Australia was the EU’s 20th largest trading partner in goods, according to the European Commission. Bilateral goods trade overall topped €41 billion that same year. On investment, the EU is one of the largest destinations for Australian investment flows.
The two sides have said that they aim to launch trade talks next year. Given that the UK will still be a full EU member then, how that process will work in tandem with the joint working group’s preparations for a London-Canberra deal is not yet clear.
The latter working group is due to hold its first such meeting early next year, with biannual meetings to take stock of the discussions.