The UK and Australia have agreed a free trade deal, the first agreement negotiated from scratch after Brexit.
Boris Johnson said the tariff-free deal, which Downing Street said will see British cars, Scotch whisky and biscuits and ceramics become cheaper to sell, marked a “new dawn” in the UK’s relationship with Australia.
The prime minister added: “Our new free-trade agreement opens fantastic opportunities for British businesses and consumers, as well as young people wanting the chance to work and live on the other side of the world.
“This is global Britain at its best – looking outwards and striking deals that deepen our alliances and help ensure every part of the country builds back better from the pandemic.”
Key points of the deal revealed so far include:
• Britons under the age of 35 will be able to travel and work in Australia more freely
• Tariffs will be eliminated on Australian favourites like Jacob’s Creek and Hardys wines, swimwear and confectionery, as well as increasing choice for British consumers and saving households up to £34m annually
• Downing Street said the deal will help distillers by scrapping tariffs of up to 5% on Scotch whisky, while car manufacturers in the Midlands and the North of England will see tariffs of up to 5% cut
• Number 10 said more than 450 businesses in Wales exported to Australia last year and stand to benefit, while “life science companies and chemicals manufacturers are set to benefit in particular”
• It said that in Northern Ireland, 90% of all exports to Australia are “machinery and manufacturing goods used extensively in Australia’s mining, quarrying and recycling sectors”, and under the deal tariffs will be removed and customs procedures “simplified”
Trade between the UK and Australia was worth £13.9bn in 2020, with the UK ranking as Australia’s fifth largest trading partner.
🇬🇧🇦🇺trade deal done. The UK-Australia agreement:
👉 is the first we have negotiated from scratch, showing what we can do as a sovereign trading nation
👉 is a fundamentally liberalising deal
👉 strengthens the bond between two great friends and democracies
— Liz Truss (@trussliz) June 15, 2021
The UK government estimates that the deal will boost Australia’s gross domestic product, the total value of goods produced and services provided, by between 0.01% and 0.06%.
Mr Johnson is understood to have agreed the deal over dinner with Australian Prime Minister Scott Morrison in Downing Street on Monday, with a final agreement in principle due to be published this week.
There was understood to be division among ministers over the terms of the deal last month, with some concerned a tariff and quota free agreement could leave British farmers struggling to compete.
Farming groups had warned that a proposed free trade deal with Australia could imperil livelihoods.
Reacting to the news, the National Farmers Union called for more details on the provisions for animal welfare.
“While the government has previously been keen to highlight how our Free Trade Agreements will uphold our high standards of food production, there has always been a question mark over how this can be achieved while opening up our markets to food produced to different standards,” NFU president Minette Batters said.
“We will need to know more about any provisions on animal welfare and the environment to ensure our high standards of production are not undermined by the terms of this deal.”
In a bid to allay those fears, Downing Street said that under the deal British farmers will be protected by a cap on tariff-free imports for 15 years, with other “safeguards” to protect them.
Speaking at Downing Street alongside Mr Morrison on Tuesday, Mr Johnson said he thought the agreement would lead to “even more trade” between the two nations.
The PM said he was “not going to exaggerate the overall increase of respected GDPs from this”, but added: “But it’s more important politically and symbolically, we’re opening up to each other and this is the prelude to a general campaign of opening up to the world.”
Mr Johnson said the deal would be “good news for British car manufacturers, it will be good news for British services, for British financial services and it will be good news for the agricultural sector on both sides”.
Asked what it will mean for farmers, the PM said: “We’re opening up to Australia, but we’re doing it in a staggered way and we’re doing it over 15 years.
“We’re retaining safeguards, making sure we have protections against sudden influxes of goods and also making sure we adhere to the strongest possible standards for animal welfare.
“As you can imagine, that is what the British consumer is going to want.”
Mr Morrison, who met the Queen at Windsor Castle during his trip, said: “Our economies are stronger by these agreements, this is the most comprehensive and ambitious agreement that Australia has concluded.”
The deal will also bolster the UK’s bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Downing Street said.
International Trade Secretary Liz Truss said the £9trn free trade area is “home to some of the biggest consumer markets of the present and future” and joining it will “create unheralded opportunities for our farmers, makers, innovators and investors to do business in the future of engine room of the global economy”.
Sarah Olney, the Lib Dem spokesperson for trade, said the government had “serious questions to answer about how this agreement will prevent cheaper and lower quality food products flooding the UK market, threatening our agriculture and food safety”.
And a cross-party group of MPs from across the four nations of the UK has written to Ms Truss, calling for parliamentary scrutiny of the deal.
“No one wants to see our farming communities in Wales, Scotland, England and Northern Ireland undermined for the sake of a politically expedient trade deal,” they said.
Analysis: Marginal gains, big symbolism
By Tamara Cohen, political correspondent
Sealed with an elbow bump outside Number 10, the first post-Brexit trade deal negotiated from scratch.
British cars, Scotch whisky and confectionary will be the winners, the government says. While products such as Australian wines should be cheaper to import and young people able to more easily live and work down under.
A major sticking point – which split the cabinet – has been farming, with British beef and lamb farmers concerned they will be undercut by cheaper imports made to lower welfare standards.
The plan unveiled today is that they will be protected by quotas phased out over 15 years.
And, Michael Gove said this morning, by the fact Australia is too far away to take too much of their trade. But concerns remain over food and environmental standards in this and future deals.
The benefits to the UK economy are modest. £14bn a year of trade is done with Australia. The government hopes to boost exports up to £900m – or 0.02% of GDP.
But ministers hope it leads the way to membership of a bigger Asia-Pacific trade bloc, and can turn “Global Britain” from ambition into action.