The Guardian | 17 June 2020
UK begins talks with Australia and New Zealand on free trade deal for post-Brexit era
by Daniel Hurst and Charlotte Graham-McLay
Australia and New Zealand are about to begin negotiations on a free trade agreement with the UK in what the Australian trade minister said was “a strong signal of our mutual support for free trade” in a post-Covid-19 world.
Simon Birmingham said Australia was “ready to help the UK find new beginnings post-Brexit and in doing so, open up new doors for our farmers, businesses and investors”.
“We’ve been preparing for this deal since the UK decided to leave the EU and welcome their agreement to commence negotiations,” Birmingham said in a statement issued on Wednesday.
The UK is Australia’s seventh largest trading partner.
Birmingham said Australia and the UK hoped to conclude the deal “as quickly as possible” – possibly by the end of this year, although he conceded that may be an ambitious timeframe.
He said both sides wanted “an ambitious and comprehensive agreement that builds on our already significant people-to-people links and creates new opportunities for exporters, generating more jobs in our nations”.
“As both our nations begin to shift our focus towards the economic recovery from Covid-19, a UK-Australia FTA will help to expand choices and export opportunities and secure stronger supply chains to better withstand future shocks,” Birmingham said.
New Zealand’s trade minister, David Parker, echoed Birmingham’s sentiments.
“As the UK embarks on its next steps post-Brexit, New Zealand is pleased to be among the first countries to negotiate a trade agreement with one of our oldest friends,” Parker said.
New Zealand and Britain had “a close relationship, including strong trade and economic ties, common values and traditions and a shared history”, he said.
The UK is New Zealand’s sixth largest trading partner, with two-way trade totalling almost NZ$6bn last year. China, Australia and the EU top New Zealand’s list.
Parker said talks would focus on removal of trade tariffs, new approaches to non-tariff barriers, streamlined customs, regulatory cooperation, development of digital trade and trade provisions in support of sustainable development – including climate change.
New Zealand’s prime minister, Jacinda Ardern, said she hoped the tariffs of “over 8% for kiwifruit, roughly 16% for manuka honey” could be reduced.
“As close friends, we look to each other when we have faced challenges, no more so than now as we each work to recover and rebuild from the impacts of Covid-19,” Ardern told reporters.
Agriculture will be a hotly contested issue; New Zealand lost its privileged access to the British markets in 1973 when the UK joined the European Economic Community, the precursor to the EU, a slight still felt by some in the primary industries.
“We always run into issues on agricultural access,” said Parker, the trade minister. “Having said that, I think the United Kingdom is expressing a view that they want to be more open with the rest of the world after Brexit than before, so we are hopeful.”
But he warned that nothing would be resolved while Brexit negotiations continue.
“We share an ambition to liberalise tariffs as much as possible, [including] on agricultural goods,” said Laura Clarke, the British high commissioner to New Zealand. “But also of course the UK would like to see tariffs on gin – currently 5% – reduced, we would like to see the tariffs on car parts – currently 10% – reduce, and so it will be a whole-piece negotiation.”
During an address to Australia’s National Press Club on Wednesday, Birmingham said Australia would be looking to secure better market access for agriculture, removal of tariffs on wine, and high standard rules on digital trade and investment.
The new talks come at a time when Australia is also negotiating a trade agreement with the European Union. Birmingham described the EU as “a massive high income market of almost 450 million people and as a bloc it’s already Australia’s third-largest trading partner and our third largest source of foreign investment”.
Asked whether the UK or EU trade deal was a higher priority for Australia, Birmingham said: “I don’t have any favoured children in that regard – I want to love them both equally.”
He acknowledged that the EU was a much bigger market than the UK but he said the latter was also significant, and had a bigger economy than Australia’s.
“That means it presents significant opportunities for us,” Birmingham said. “Back at the time that the UK entered into the European Economic Community it was our third-largest goods trading market. It’s now our 12th.”
The first round of negotiations between Australia and the UK is due to begin on 29 June, but due to Covid-19 restrictions will be held remotely.
The UK prime minister, Boris Johnson, said this week he hoped to wrap up a trade deal with the EU before the end of July, paving the way for bilateral deals with nations such as Australia and New Zealand. But many obstacles remain, such as agreement on fisheries.
Britain has also set out its plans for deals with the US and Japan.