17 Jun

'‘Competitive tensions’ UK and EU in race to seal trade deals with Australia: Birmingham' Jacquelin Magnay, The Australian

Trade Minister Simon Birmingham said there would be “competitive tension” between the United Kingdom and the European Union as to which economic area would be first to sign a free-trade agreement with Australia.

Australia and the UK officially launched formal talks for a free-trade agreement at lunchtime Wednesday with expectations from both sides to have a “bold and ambitious deal” quickly wrapped up by this Christmas.

Senator Birmingham told The Australian that the Australia-UK talks — estimated to be worth hundreds of millions of additional export opportunities for Australian farmers, industry and business — “is hoped to move very quickly to (completion in) the last quarter of this year”.

But he said the existing Australia-EU trade talks were similarly poised.

The EU discussions have been ongoing since 2018 and the seventh round of talks was completed last month.

Senator Birmingham said “our ambition is that each deal is done as quickly as possible” but added “we also want to get great deals”.

He said: “Launching the UK free trade agreement creates a little competition tension with the EU, who will finish first?’’

It had always been expected that while Australia had started talks with the EU well before the UK, the UK deal would be much easier to sort out because of similar rule of laws, and historic ties.

Coronavirus delays

Senator Birmingham said while it was preferable to “talk turkey in person”, the trade teams would talk virtually with the UK.

The start has already been delayed by several months because of coronavirus.

The Australia-EU talks have taken time, especially touching on the protectionist measures offered to French farmers, and debates over the protection of geographical names for various products, but a UK free trade deal could also strike challenges around the UK government assistance provided to British farmers.

The UK government is sensitive to the views of the farming sector which is closely tied to the ruling Tory party.

Senator Birmingham said the UK farming sector shouldn’t fear a flood of Australian beef or lamb heading its way under a free trade deal, as Australia’s highly sought-after produce has valuable markets close to home.

“But I see upside for any expansion of choice for our exporters,’’ he said.

Discussions with the UK will look to build on Australia’s traditional exports with the UK in areas such as financial services and digital trade.

It will also involve discussions around opening up visas for business people in both countries.

UK International Trade Secretary Liz Truss said the free trade discussions will also take place with New Zealand as well as Australia.

Australia an ‘old friend’: Truss

“Our new-found status as an independent trading nation will enable us to strengthen ties with countries around the world,’’ she said.

Ms Truss added: “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.

“Pivoting towards the Asia-Pacific will diversify our trade, increase the resilience of our supply chains and ensure the UK is less vulnerable to political and economic shocks in certain parts of the world.”

British drinks companies, the automotive industry and professional services firms are among those expected to benefit from removing barriers to trade with Australia. Opportunities for UK businesses include additional access for UK services and investment, the removal of tariffs and other barriers to trade, and the chance to shape the future of digital trade.

The British government said the value of its exports to Australia and New Zealand could increase by around £1 billion as a result of the deals and it hoped they will provide a step towards UK membership of the Comprehensive and Progressive Agreement for trans-Pacific Partnership (CPTPP), the 11 country free trade area which accounts for 13% of global GDP.

 

By Jacquelin Magnay, The Australian.

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