29 Nov

'UK minister Liam Fox: trade with UK nears 'saturation'' Adam Creighton, The Australian

A British cabinet minister has said trade with Australia was reaching a “saturation point”, playing down the benefits of a UK-Australia free trade agreement that British Prime Minister Theresa May had said was a “priority”.

Liam Fox, Britain’s international trade minister who is in Australia to meet Malcolm Turnbull and Trade Minister Steven Ciobo, suggested that far greater benefits lay in multilateral agreements to liberalise services internationally, such as mutual recognition for lawyers and accountants.

“Our bilateral trade and investment will have a saturation point,” Dr Fox said, noting that Britain was the second-biggest destination for Australian outward investment.

“We have such a strong trade and investment relationship (with Australia) already and they are relatively similar-shaped economies,” he added, saying he was optimistic a post-Brexit free-trade deal with Australia would be signed, and could include freer movement of workers among the two countries.

In an interview yesterday, Dr Fox, a former defence minister in the Cameron government, said the British cabinet was “absolutely” united behind Mrs May, whose leadership has been under a cloud since the loss of her party’s parliamentary majority in the May general election.

In July, Mrs May said an “ambitious and comprehensive” deal was a “priority” for Britain.

Dr Fox said deals with Australia, New Zealand and the US were “all moving forward at the same pace”.

“Prioritisation of TISA (Trade in Services Agreement) is very high up because in our bilateral agreements, although we have some gains to make, (they aren’t as) much as we’d both make from liberalisation of the general services provisions,” he said.

The TISA is being negotiated by European countries, the US, Canada and Australia, which ­together make up 70 per cent of global services trade in countries of 1.62 billion people.

“This is the great opener for mature economies like the UK, like Australia,” Dr Fox said, suggesting greater scope for exports between the two ­nations. “If you look at exports (to Australia), $13bn is great, but they were up 3 per cent last year, and Australian exports to the UK were actually down, at a time UK exports grew 15 per cent overall.

“When we’re discussing trade our bilateral trade isn’t necessarily the most important thing to us, it’s what we can do jointly.”

Dr Fox said Britain was open to liberalising movement of workers with Australia as part of trade negotiations.

“We have not been able to control our movements because we’ve had to accept unrestricted movement (as part of the EU rules),” he said.

Dr Fox said China’s violation of international law in the South China Sea was “ a ­potential threat to maritime ­security that affects all of us”.

He was supportive of countries’ effort to cut their corporate tax rate: “Last year we had a record tax in corporate tax.”

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