UK FTA helps exporters recover from China coercion

Conscious of the importance of national sovereignty, we argued before the Brexit referendum in June 2016 that exiting the European Union would be in Britain’s best interests. We also anticipated the benefits of a free-trade deal with Australia’s oldest trading partner and close ally. Last week’s signing of the FTA by Australian Trade Minister Dan Tehan and British Secretary for Trade Anne-Marie Trevelyan was a win-win for both sides, despite the concerns of some British farmers over beef. The deal is the most comprehensive Australia has struck with any nation apart from New Zealand and is the first UK FTA since Brexit. Australia beat the US to the post on that achievement and avoided having climate change penalties written into the agreement deal.

For the Johnson government, reeling from scandals over parties during lockdown last Christmas, a thumping by-election loss in the safe Tory seat of North Shropshire and the resignation of Brexit negotiator David Frost, the deal gives some much-needed positive news. For Australia, bouncing back after China’s trade boycotts cost exporters $20bn, it confirms our ability to broaden our markets. The FTA also draws Britain closer into the strategically sensitive Asia-Pacific region, where it is an AUKUS founder and has an application pending to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

For Australia, the practical benefits of the 32-chapter agreement are impressive. The FTA will see tariffs abolished on 99 per cent of goods worth ­almost $10bn and save Australian households more than $200m a year on British imports. Australian farmers will have improved access to 65 million UK consumers. In good news for Australian winemakers, who suffered under Chinese coercion, $43m a year in Customs duties will be lifted from Australian wines entering Britain, which has overtaken the US as Australia’s largest wine market. Australian beef producers will enjoy a tariff-free quota of 35,000 tonnes in the British market, to expand to 110,000 tonnes in year 10 when tariffs will be eliminated. Lamb producers have also won favourable deals.

Young people wishing to work abroad will be able to stay for longer working holidays, until the age of 35. For the first time in 40 years, Australian jobseekers will be able to compete on an equal footing with EU nationals in the UK. Australian businesses will have the guaranteed right to bid for a greater variety of UK government contracts, while UK businesses will be encouraged to invest in Australia.

Before the signing, Britain was Australia’s fifth-largest trading partner and the nation’s third-largest services trading partner. The agreement demonstrates the value of free trade as a driver of economic growth, job opportunities and stronger bilateral relationships. Australia’s trade liberalis­ation since 1986 has led to real GDP being 5.4 per cent higher in 2016 than it would have been otherwise, Mr Tehan wrote in The Australian last week. “For the average Australian family, trade liberalisation is ­estimated to have seen real income being $8448 higher than otherwise,’’ he wrote. The minister also wrote that the FTA corrected a “historical wrong” after Australian farmers became collateral damage from the UK’s 1975 decision to enter the European Common Market. Australian British Chamber of Commerce CEO David McCredie, who was in Adelaide as the FTA was signed, told The Australian that skills mobility in fields such as renewable energy, health and infrastructure development would be the most exciting part of the agreement. And cyber technology, artificial intelligence and quantum mechanics would be vital to AUKUS. Protectionist sceptics who rail against free trade should recognise its benefits.