THE BUSINESS OF INTERNATIONAL TRADE
THE BUSINESS OF INTERNATIONAL TRADE
The much vaunted free trade agreements with Australia and New Zealand come into force at midnight tonight, 31 May.
The first FTAs negotiated from scratch by UK since it left the EU, they are part of the UK's strategic tilt to the Indo-Pacific region and, says the DBT, "complement our accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – a huge trade bloc which will have a total GDP of £12 trillion once we join."
To help businesses use the deals, the Department for Business and Trade (DBT) is providing a 'toolkit' which aims to help British businesses navigate the changes and provide "help and support for businesses at every stage of their export journey".
The deals remove tariffs on UK goods exports to the Australasian countries. An eclectic choice of "handpicked" UK goods including signed Beano comics, personalised Cambridge Satchels, Brighton Gin, an England cricket top signed by James Anderson and Emma Lamb, a Wales rugby shirt signed by the men's team, a real tennis racket from Gray's of Cambridge and Burleigh pottery are among the first shipments to be sent under the new arrangements. Not perhaps the most representative items that the UK aims to export at scale 'Down Under'.
British Chambers of Commerce's Head of Trade William Bain, commented: "A new era of international trade will begin today as the first trade agreements agreed by the United Kingdom since it left the European Union come into force. Combined bilateral trade with Australia and New Zealand amounts to over £15bn per year. Inward foreign direct investment from both countries into the UK is £16.6bn, and in the other direction represents a combined £42.1bn. By 2035, the Australia deal could boost our economy by £2.3bn per year, and the New Zealand deal by £0.8bn, over the long-term, with benefits felt across the UK. For UK firms exporting green goods and services to New Zealand, the agreement offers world leading terms. As the World Trade Organisation recently pointed out, if we get the right fundamentals in place, we can double green trade exports by 2030. Of course, the success of any free trade agreement comes down to whether businesses use it and across the UK only 10% of firms are currently exporting."
However the FTAs have not been without controversy, particularly in the agricultural sector. NFU President Minette Batters responded to the Trade and Agriculture Commission's report into UK-Australia FTA, saying: "As the first deal to be struck under our new independent trade policy, this FTA provided a chance to set the standard for future deals which incentivise trade in food produced to higher environmental and animal welfare standards. However, it is clear from this report that the UK government has missed the opportunity to reach a genuinely innovative and world-class FTA with Australia. While it is reassuring that this deal will not result in a change in production standards here – for instance, imports of hormone-reared beef will still be banned – the report confirms that this FTA simply opens up UK agricultural markets for Australian produce, whether or not produced to the same standards that are legally required of UK farmers." A DBT spokesman said, "The deals include robust protections for British farmers, including staging tariff liberalisation for sensitive goods over time."
Business and Trade Secretary Kemi Badenoch said: "Today is a historic moment as our first trade deals to be negotiated post-Brexit come into effect. Businesses up and down the country will now be able to reap the rewards of our status as an independent trading nation and seize new opportunities, driving economic growth, innovation and higher wages."
More information and guidance on the UK-Australia FTA is available on the GOV.UK and GREAT websites:
https://www.gov.uk/government/news/uk-and-australia-sign-world-class-trade-deal
https://www.great.gov.uk/markets/australia/uk-australia-free-trade-agreement-guidance/
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