The UK has today started negotiations with Australia and New Zealand for trade deals which could boost UK exports by around a £1bn.
The government announced its negotiating objectives today and said potential deals could give additional market access for UK services and investment, remove tariffs and other barriers to goods trade, and give the UK the “chance to shape the future of digital trade”.
‘Old friends’
The UK last year traded £21bn worth of goods and services with the two Commonwealth nations. Drinks companies, the automotive industry and professional services firms are among those expected to most benefit from the deals.
“Our new-found status as an independent trading nation will enable us to strengthen ties with countries around the world,” said Secretary of State for Trade, Liz Truss.
“Ambitious, wide-ranging free trade agreements with old friends like Australia and New Zealand are a powerful way for us to do that and make good on the promise of Brexit.”
Australia
Australian trade minister Simon Birmingham said he hopes a deal can be reached in “record time”.
The UK is Australia’s seventh largest trading partner, but Australia is only the UK’s 19th, behind several EU countries.
Key points from the government’s objectives for an Australia deal include:
- Focus on services which account for 60% of UK exports to Australia and were worth £6.9bn in 2019. A deal could enhance the ability of professionals to move more easily between the two countries and support mutual recognition of professional qualifications.
- Reduce barriers (including tariffs) to goods trade
- Reduce digital trade barriers, particularly around ecommerce
- Better support the 13,500 SMEs already exporting to Australia and encourage more to follow suit
Scottish whisky producers, pharmaceutical firms in the south east and east of England, financial services in London, and transport, machinery and automotive manufacturers in Northern Ireland and the north east, west midlands and east of England are mentioned as potential winners from a deal.
However, Birmingham told the FT that Australia will want to gain market access for its agricultural sector.
Australia lost market access for its agricultural products when it joined what is now the EU half a century ago.
New Zealand
A UK-New Zealand deal could increase UK exports by up to £100m, according to the UK’s negotiating paper published today.
It is described as an “open, advanced economy” and has the highest ‘Ease of Doing Business’ ranking with the World Bank. UK exports have grown by approximately £1bn over the last 20 years.
Like Australia, objectives for a deal include removing barriers for trade in goods and digital trade, increasing access and mutual recognition of professional services, and enhancing opportunities for UK SME exporters.
Both countries also have net-zero emissions targets and the UK hopes it can work closely with New Zealand on achieving this.
New Zealand, like Australia, will be hoping to reclaim market access in the agricultural sector.
Overall objectives
The overall objectives for both talks include:
- Enhance co-operation on technology, innovation and research and development (R&D)
- Increase the resilience of UK supply chains and diversify trade
- Futureproof agreement in line with government’s ambitions on climate and in anticipation of rapid technological developments (such as AI)
- The NHS will “not be on the table”
- The agreement must work for the whole of the UK
- The agreement must ensure high standards and protections for UK consumers and workers
The deals are also being viewed as part of the UK’s overall strategy to increase its trade presence in the Pacific region by eventually joining the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership).
To this end, the UK is already in talks with Japan and Liz Truss is expected to make a statement to the House of Commons this afternoon about the government’s intentions to join CPTPP.