Brexit agreement opens way for trade breakthroughs

Dan Tehan says the conclusion of a final Brexit deal will give renewed impetus to Australia’s efforts in securing free-trade agreements with both the UK and the EU.

New Trade Minister Dan Tehan. Picture: Getty Images

New Trade Minister Dan Tehan says the conclusion of a final Brexit deal will give renewed ­impetus to Australia’s efforts in ­securing free-trade agreements with both the UK and the EU, and boost certainty across the globe.

Britain and the European Union struck a trade deal this week after last-minute haggling over fishing quotas that will allow British firms to continue to have tariff and quota free access to ­European markets beyond the end of the year.

The deal will see Britain leave the EU single market and customs union on December 31, 4½ years after the European referendum result in June 2016.

Mr Tehan hailed the outcome, saying the Morrison government welcomed the Brexit agreement “and in particular the additional certainty it will provide in Europe and globally”.

“The deal will give renewed impetus to our efforts to secure comprehensive and ambitious free trade agreements with the UK and the EU,” Mr Tehan said.

The Morrison government is aiming to secure the new agreements in 2021 and pursue further deals with non-EU countries in Europe as it tries to diversify export markets amid escalating trade conflict with Beijing.

The UK is Australia’s seventh-largest trading partner with two-way goods and services trade valued at $30.3bn in 2018-19. It is also Australia’s second-largest source of foreign investment.

The EU is Australia’s third largest trading partner and source of foreign investment with two-way trade valued at $85bn in 2019. A free trade agreement would open up a market for Australian goods and services of close to 450 million people and a GDP of $US15.5 trillion.

British Prime Minister Boris Johnson described the agreement as “a great treaty” that would allow the UK to “take back control of our destiny” and resolve a question that had “bedevilled” British politics for decades. “This deal means a new stability and a new certainty in what has sometimes been a difficult and fractious relationship,” Mr Johnson said. “Although the arguments with our European friends were sometimes fierce, this is, I believe, a good deal for the whole of Europe.”

European Commission president Ursula von der Leyen described the negotiations as a “long and winding road” but said the final deal was fair and balanced.

Michel Barnier, the EU’s chief negotiator, warned that the deal did not “reproduce the rights of membership and on January 1 things will be very different with real changes”.

The agreement runs to about 2000 pages, including hundreds of annexes, and covers future arrangements for trade, security and fishing as well as scientific co-operation and regulatory alignment.

Leading up to Christmas, Scott Morrison said that he had spoken on several occasions with Mr Johnson as well as Ms von der Leyen about Australia’s ambitions to finalise free trade agreements.

“There is also a very big agenda to be pursued next year with the EU and the UK,” the Prime Minister said. “Already the government has increased the two-way trade that is covered by trade agreements under our government from 26 per cent to 70 per cent.

“That’s the biggest diversification of our trade opportunities that this country has ever seen … The next two big agreements we are working on is with the UK and European Union which we have been working on for some time, ever since Brexit basically began with the referendum.”

Negotiations with the UK and EU will play out as the trade conflict between Australia and China unfolds. The government has announced it will defend barley producers from the imposition of Chinese anti-dumping duties at the World Trade Organisation.