The UK and Australia sign a free trade agreement that removes tariffs on most goods, but provides longer transition periods for agricultural products.
Prime Minister Boris Johnson announced the pact on Tuesday in London with his Australian counterpart Scott Morrison.
For the Johnson administration, the agreement with Australia is the first major and new free trade agreement since Brexit that is not largely based on existing EU trade agreements like the agreement with Japan
Business correspondent based in London.
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The government wants to signal that it takes “Global Britain” as a goal seriously.
Johnson spoke of a "new dawn in our relations with Australia".
Last year the bilateral trade volume was just under 14 billion pounds (16 billion euros).
The British are happy to be able to export duty-free whiskey, cars, machines, pharmaceuticals and confectionery to “Down Under”.
Conversely, the Australians hope to deliver mainly agricultural products, food and wine to Britain.
For agricultural goods, however, an upper limit with quotas for duty-free trade will apply for 15 years.
This comes under pressure from British farmers who fear their market will be inundated with cheap beef and sheep meat from large Australian farms.
Access to the Trans-Pacific Partnership?
Johnson and Morrison presented themselves in front of shopping carts in London with products from their countries, including Australian red wine and chocolate biscuits (from TimTam) and British chocolate biscuits (from Penguin).
With a forecast increase in British-Australian trade of around £ 900 million (a good billion euros), the economic significance of the pact is manageable.
Trade Secretary Liz Truss said the agreement with Australia paves the way for British membership in the Trans-Pacific Partnership (CPTPP), which includes eleven nations from Australia and Chile to Mexico to Canada, Japan and Singapore to Vietnam, with a total of nearly 500 million people .
This is the largest free trade area with 9 trillion pounds of trade and gives access to some of the largest consumer markets in the world.
After the end of the Brexit transition period at the turn of the year, UK trade with the EU, by far the UK's largest trading partner, has become more difficult. There are no tariffs, but there are controls and more bureaucracy. The trading volume in the first quarter of 2021 was a good fifth lower than in previous years. Many exporters complain about the higher bureaucratic effort due to the new trade border.