The UK’s expected trade deal with Australia is, perhaps, one of the mega deals to come following the Brexit and a clear indication that ‘Global Britain’ is in the making.
Obviously, this issue divides the cabinet. Liz Truss, the trade secretary, praises the benefits to consumers of cheaper, tariff-free imports. However, George Eustice, the environment secretary, warns of a threat to rural livelihoods. At the Cabinet Office, Michael Gove is, apparently worried about a knock-on effect for the union if price competition hits Scottish and Welsh farmers hardest.
Needless to say that there are overstated claims on both sides; a zero-tariff, zero-quota deal is unlikely to add more than a small fraction of 1% to GDP, says the Guardian UK in an Editorial on the forthcoming deal, although it is mot a compensation for the loss of unfettered access to EU markets.
As expected the shoppers would not get an immediate and sudden glut of budget meat, though the competition would offer them more choices and, over time, lower and competitive prices. In the same manner, UK farmers would not immediately experience a negative impact like an apocalypse. There will be a change of business climate and some of the businesses would be able to brave the changes, while some others would succumb in the process.
Transatlantic Trade talks
The sheer importance of the Agreement lines in the fact that conflict sets on when the UK enters into the transatlantic trade talks; Australian deal, among other things, set benchmarks, precedents, business models and regulatory standards for products ( for instance, home-made meat), besides UK’s market opening up for the ensuing competition.
The terms and conditions that would be agreed on, would provide a prelude and starting point for US trade negotiations and it will be tougher task for trade negotiators.
Despite anxieties on the part of the UK farmers who are sending alarm signals of damages, there is optimism that both countries want to expand the current trade volume which accounts for £20.1bn.
Presently, trade in meat between the two countries is very small; roughly only 0.15% of all Australian beef exports go to the UK. Previous year, 14% of sheep meat imports to the UK came from Australia.
How does it affect the Commonwealth?
Although there may be pros and cons of the forthcoming agreement between the UK and Australia, it sets crucial precedence for future such deals, perhaps, with countries like South Africa, India and Singapore. Among other things, Australia would be able to lessen its dependency on China as a major trading partner and the UK consumers would be able to make better selections.
However, the most important outcome of the deal with Australia is nothing but, the UK setting the process of making the ‘Global Britain’ in motion. Perhaps, this heralds a new era for the UK to enter into such preferential trade agreements with the nation of the commonwealth.