History was made as the UK signed the first post-Brexit free trade deal negotiated without prior EU influence.
The new deal with Australia will come into force next year, expecting to present the potential for an additional £10.4 billion trade. According to the Department of International Trade, this could boost the economy by £2.3 billion a year which equals 0.08 per cent of Gross Domestic Product (GDP).
A brief overview of the agreement
The trade deal will eliminate tariffs on 100 per cent of UK exports, making it cheaper to sell UK products, including biscuits, whiskey, and vehicles. Additionally, 99 per cent of UK tariffs will be removed from Australian products, including Australian wine upon the reinstatement of the deal.
However, some fear the impact the agreement will have on UK farmers. Currently, only 0.15 per cent of current Australian meat exports go to the UK market. To combat fears, the deal states that quotas will remain in place on Australian beef and lamb – set to be phased out across 10 years.
The impact on UK businesses
The deal comes as great news for small and medium-sized enterprises (SMEs) already trading with Australia, which according to the UK Government, is currently 13,000. As well as this, UK businesses can bid for contracts with the Australian Government, equating to £10 billion. Further changes involve digital trade, ensuring data is free to flow between the regions whilst enforcing data protection regulations.
The Department of International Trade has also outlined that free trade between the two countries will strengthen the UK’s opportunity to enter the Indo-Pacific free trade region (one of the largest free trade areas).
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