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UK and Australia announce new trade deal UK and Australia in first post-Brexit trade deal
(about 1 hour later)
Boris Johnson and Scott Morrison agreed the broad terms of the deal over dinner on MondayBoris Johnson and Scott Morrison agreed the broad terms of the deal over dinner on Monday
A trade deal between the UK and Australia has been agreed between Prime Minister Boris Johnson and his counterpart, Scott Morrison.A trade deal between the UK and Australia has been agreed between Prime Minister Boris Johnson and his counterpart, Scott Morrison.
Downing Street said the new pact meant British products such as cars, Scotch whisky, biscuits and ceramics would be cheaper to sell to Australia.Downing Street said the new pact meant British products such as cars, Scotch whisky, biscuits and ceramics would be cheaper to sell to Australia.
However, there has been concern from UK farmers over the deal.However, there has been concern from UK farmers over the deal.
The agreement is the first trade deal to be built from scratch since the UK left the EU.The agreement is the first trade deal to be built from scratch since the UK left the EU.
It is seen as an important step towards the UK joining a wider Asia Pacific free-trade agreement.It is seen as an important step towards the UK joining a wider Asia Pacific free-trade agreement.
As part of the pact, the government says Britons under the age of 35 will be able to travel and work in Australia more freely.
"Today marks a new dawn in the UK's relationship with Australia, underpinned by our shared history and common values," Mr Johnson said in a statement:"Today marks a new dawn in the UK's relationship with Australia, underpinned by our shared history and common values," Mr Johnson said in a statement:
"Our new free trade agreement opens fantastic opportunities for British businesses and consumers, as well as young people wanting the chance to work and live on the other side of the world."Our new free trade agreement opens fantastic opportunities for British businesses and consumers, as well as young people wanting the chance to work and live on the other side of the world.
"This is global Britain at its best - looking outwards and striking deals that deepen our alliances and help ensure every part of the country builds back better from the pandemic.""This is global Britain at its best - looking outwards and striking deals that deepen our alliances and help ensure every part of the country builds back better from the pandemic."
NFU president Minette Batters has warned farmers would struggle if the wrong deal is struck
But the newly formed cross-party UK Trade and Business Commission reacted with alarm to the deal, which it says has not been properly seen nor examined by parliament.
It is making a formal request for the full text of the agreement for scrutiny.
"The prime minister has just spent the weekend arguing with our closest allies about a treaty that he pushed through parliament with limited scrutiny," said Labour's Hilary Benn, who chairs the commission.
"This highlights the risks of rushing through deals for short-term political gain while failing to understand the long-term consequences.
"A detailed and objective analysis is needed of how this deal will affect businesses around the country, particularly hard-hit sectors such as farming."
The UK government has signed a long list of trade deals over the past year, but they have been rollovers of those the UK already had as part of the EU.The UK government has signed a long list of trade deals over the past year, but they have been rollovers of those the UK already had as part of the EU.
Why is an Australia trade deal controversial?Why is an Australia trade deal controversial?
'Safeguards' promise over UK-Australia trade deal'Safeguards' promise over UK-Australia trade deal
Farmers' opposition to UK-Australia trade deal growsFarmers' opposition to UK-Australia trade deal grows
Food and drink sector criticise Australia trade dealFood and drink sector criticise Australia trade deal
Mr Johnson and Mr Morrison agreed the deal over dinner on Monday. The new deal could allow the UK to eventually join a wider Asia Pacific free-trade agreement, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which the government says could provide British farmers with huge opportunities.
The new trade deal gives UK and Australian food producers and other businesses easier access to each other's markets - an ambition perhaps alluded to by the meal served up to the two prime ministers - Welsh lamb and Scottish smoked salmon, served with Australian wine.
The UK government says membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) could provide British farmers with huge opportunities.
However, there have been concerns in the farming community about the UK compromising on its food standards, as well as tensions in government between the Environment Secretary, George Eustice, and the Trade Secretary, Liz Truss.However, there have been concerns in the farming community about the UK compromising on its food standards, as well as tensions in government between the Environment Secretary, George Eustice, and the Trade Secretary, Liz Truss.
'We don't have enough beef to flood the UK market''We don't have enough beef to flood the UK market'
UK farmers also have concerns there will be no meaningful safeguards in place to stop farmers being undercut by cheap imports.UK farmers also have concerns there will be no meaningful safeguards in place to stop farmers being undercut by cheap imports.
Farmers in Australia are allowed to use some hormone growth promoters, pesticides, and feed additives that are banned in the UK.Farmers in Australia are allowed to use some hormone growth promoters, pesticides, and feed additives that are banned in the UK.
According to the National Farmers Union (NFU), Australian farmers are able to produce beef at a lower cost of production, and could undercut farmers in the UK. The UK Trade and Business Commission is worried that Australian farming operates on a scale that UK counterparts cannot compete with, saying Australia contains eight of the 10 largest farms in the world, including one which is larger than Israel.
Scotland had raised worries about the farming industry being overwhelmed if the market was flooded with lower standard goods. According to the UK's National Farmers Union, Australian farmers are able to produce beef at a lower cost of production, and could undercut farmers in the UK.
The Department for International Trade has previously said any deal with Australia would include protections for the agriculture industry and not compromise the UK's high standards. Ministers in Scotland have also raised worries about the farming industry being overwhelmed if the market is flooded with lower standard goods.
Trade Secretary Liz Truss defended plans for a deal with Australia last month, telling MPs: "We will make sure in all the deals we do that British farming thrives." The government says British farmers will be protected by a cap on tariff-free imports for 15 years, using tariff rate quotas and other safeguards.
Welsh lamb and Australian wine are said to have been on the menu as Boris Johnson and Scott Morrison settled the deal over dinner - but ultimately this deal is more significant in symbolic than economic terms.
For the government's own estimates say the new arrangements may add just 0.02% to our GDP, and the impact on prices negligible.
But this, the first bespoke deal of the post-Brexit era, signifies global Britain's ambitions. The hope is that this paves the way for more alliances beyond the EU - starting with a group of trans-Pacific nations, the CPTPP. They only buy 8% of our exports - and we have deals already with the majority of members. But the ultimate hope is that key partners - such as the US - might also join.
It also symbolises though, the sacrifices that may have be needed get deals. British farmers fear they will face more competition from Australian counterparts on their home soil. Australian farmers say they won't be flooding the market. The UK is so far away that even the 80% increase in Australian imports the government predicts equates to 0.1% of total UK imports.
It'll be a while before the detail of this deal can be publicly scrutinised - even by those who'll be affected. But the concern is that this sets a marker, that agriculture may be up for grabs when it comes to compromise in future and far bigger trade deals.
In 2019-20, trade in goods and services between Australia and the UK was valued at £20.1bn.In 2019-20, trade in goods and services between Australia and the UK was valued at £20.1bn.
The government says the deal will boost UK industries that employ 3.5 million people across the country.
Metals, wine and machines have formed the biggest goods exports from Australia to the UK, while Australia's main UK imports are cars, medicines and alcoholic drinks.Metals, wine and machines have formed the biggest goods exports from Australia to the UK, while Australia's main UK imports are cars, medicines and alcoholic drinks.
Trade in meat between the two countries is small at present, with 14% of sheep meat imports to the UK coming from Australia and just 0.15% of all Australian beef exports going to the UK.Trade in meat between the two countries is small at present, with 14% of sheep meat imports to the UK coming from Australia and just 0.15% of all Australian beef exports going to the UK.
The deal marks the end of what has essentially a 50-year lock-out for Australian farmers, who have struggled to navigate Brussels' restrictions, tariffs and quotas.
The president of the Australian National Farmers' Federation said it had been very difficult to break into the UK because it was "way too expensive and way too far".
Australian farmers have also been looking to diversify due to the increased tensions between Australia and China. In the past year, China has imposed tariffs and restrictions on everything from Australian beef, barley and wine, to rock lobster and coal.