How significant is the UK-Australia trade deal announced this week during Prime Minister Scott Morrison’s visit to Britain? Well, Australia already has 17 genuine free trade agreements, including with the United States, Japan and China. But the free trade agreement with the UK is undoubtedly one of the highest quality agreements Australia has ever reached. In terms of the liberalisation of markets, it is only exceeded by the free trade agreement Australia has with New Zealand.
This demonstrates something very important: that the UK, having left the European Union, is going to be a genuine champion of global trade liberalisation. That will not only be good for the British economy and UK consumers – it will also be very good for British diplomacy and Britain’s standing in the world.
For a while, Australians had their suspicions that the UK would find it difficult to move on from the traditions and strictures of EU trade policy. While the European Union has many trade agreements, very few of them are of a high quality. In almost every case, there are substantial restrictions imposed on agricultural trade. Thankfully the UK, in its agreement with Australia, has demonstrated that it will break away from that less liberal model.
Australians had their suspicions that the UK would find it difficult to move on
Secondly, the UK has in a very practical way demonstrated its tilt to the Indo Pacific region. This was a significant component of the Integrated Review, which was published by the Government last month and followed on from Policy Exchange’s Indo-Pacific Commission report, A Very British Tilt.
The free trade agreement with Australia is a first step towards the greater goal of the UK becoming a member of the Comprehensive and Progressive Trans-Pacific Partnership. If the UK can join the CPTPP, it will open up for British exporters – including farmers – a huge global market in the fastest growing corner of the Earth.
Failure to reach an agreement with Australia would have made membership of the CPTPP impossible. As it is, the high quality of the UK-Australia agreement will be a very clear demonstration to the other ten members of the CPTP that the UK is ready to do business in ways that can be mutually hugely beneficial.
And then there is the issue of sentiment. It is often said that in politics, poetry triumphs over a balance sheet. The people of Australia and the UK will instinctively warm to this great trade agreement between our two countries.
The cultural and ethnic links between Australia and the UK, the common bonds of history, the shared language, the similarities of our legal institutions and political structures make Australia and the UK two of the most like-minded countries in the world.
British foreign policy makers over the last four decades have deliberately focused on relations with Europe and downgraded the relationship with Australia and other like-minded countries. That has been an era-defining foreign policy mistake. The UK should always have invested heavily in those relations which are its most trusted, steady and reliable. More than that, the British and Australian publics see their counterparts as family.
Overall, the UK-Australia free trade agreement is a triumph. It is an agreement of the highest quality which promotes the great traditions of trade liberalisation so vehemently prosecuted by the UK over so many decades. What is more, it anchors the UK in the Indo-Pacific region for the first time in five decades and it shows the UK has decided that, after all, it wants to invest in its family relationships.
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