James Forsyth

The Australian trade deal is about more than just trade

The Australian trade deal is about more than just trade
(Photo by Simon Dawson / No. 10 Downing Street)
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What happens with an Australia trade deal won’t just reveal how serious this country is about free trade but also how committed it is to helping democratic countries stand up to China.

China is Australia’s largest trading partner but since Australia called for an independent inquiry into the origins of coronavirus, Australian-Chinese relations have severely deteriorated. Beijing is now trying to use this economic relationship to get Canberra to fall into line. 

China has imposed huge tariffs on Australian barley and on wine for the next five years, while technical reasons have been found to bar most Australian timber and beef from the country. If in these circumstances the UK failed to do a trade deal with Australia it would make a mockery of any British claim that it wants to promote democratic solidarity against Beijing.

The Australia deal is also important because of New Zealand’s dependence on China; it exports almost half of its wool and meat to the growing superpower. Already, this is leading to reluctance from Auckland to criticise China. If a UK-Australia trade deal falls through, that will only strengthen New Zealand’s sense that it should not alienate such a large trading partner.

The worries about the effects that an Australian trade deal would have on British farmers are overdone. Meat consumption is growing across Asia, and not just in China, so Australian farmers are likely to continue to concentrate on that market where beef prices are higher than they are here.