The Commonwealth of Australia and The United Kingdom has signed a free trade deal on 15th June 2021. This trade deal eliminates tariffs on wide range of goods. This deal was signed following UK’s exit from European Union. With this deal, UK seeks to expand links across the world.
Significance of FTA
- The Free Trade Deal is expected to boost exports of traditional British products like Scotch whisky. It will also boost imports of lamb and wine from Australia.
- FTA will also help it join “Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)”. CPTPP is considered as a gateway of increasing trade throughout Asia-Pacific region.
- It will reduce tariffs on products clothing & cars and reduce levies on agricultural products. However, reduction of levies on agricultural products sparked a backlash from farming sector in United Kingdom. They are of the view that, they would be undercut by cheap meat imports from Australia.
With which countries UK is having trade deal?
The United Kingdom is having free trade deals with 7 of 11 CPTPP members viz., Australia, Chile, Mexico, Japan, Canada, Singapore and Vietnam. The FTA with Australia is UK’s first trade deal that was negotiated from scratch since UK left the European Union. Deals with Japan and Canada were built on existing agreements struck by European Union.
United Kingdom-Australia Relation
The United Kingdom is Australia’s 5th largest trading partner. Goods and services from both the sides is valued at 36.6 billion Australian dollars in a year. UK’s trade with Australia is about 1.2 per cent of its total trade in the year 2020.
Comprehensive and Progressive Agreement for Trans-Pacific Partnership
The Trans-Pacific Partnership, also known as TPP11 or TPP-11, is a trade agreement among Australia, Brunei, Chile, Malaysia, Canada, Japan, Mexico, New Zealand, Singapore, Peru and Vietnam. It evolved from Trans-Pacific Partnership, that never entered into force because of withdrawal of USA.
Australia and UK Free Trade Deal Australia and UK Free Trade Deal