The UK and Australia have agreed the vast majority of a free trade deal and aim to resolve the remaining issues in order to reach a full agreement by June.
“A fundamentally liberalising agreement”
“It is a win-win for both nations. It is a fundamentally liberalising agreement that will support jobs across the country and help us emerge stronger from the pandemic, strengthening ties between two democracies who share a fierce belief in freedom, enterprise and fair play,” said the International Trade Secretary Liz Truss, in the joint Statement published on gov-uk
Not a simple replica
This UK-Australia agreement will not be a simple replica of the trade terms that Britain had as a European member. This deal could add £500m to UK GDP over the long-term.
The benefits for both countries
A free trade agreement is a pact between two or more countries to encourage trade - generally in goods or services - by reducing barriers and making exports and imports cheaper. The aim is to reduce tariffs for trading goods, increase DGP and invite new investments.
Reaching an agreement with Australia is one of the pillars of post-Brexit strategy to strengthen commercial links with the Indo-Pacific region. Truss hopes this deal will allow the UK to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) within the next 12 months. Indeed, joining the CPTPP would have a wider positive impact on UK GDP.
What could it mean to North West and Greater Manchester Companies?
In 2019, circa of 2,900 companies in the region were proactively exporting to Australia over £410 million, and Greater Manchester was the leading area in terms of export value and number of companies trading in this market. The North West region has already experienced a 17% growth in its exports to Australia in the 2016-19 period with Greater Manchester registering the largest growth amongst the other North West regions (52%).
With an estimated USD$2,4bn of unrealised export growth potential for British companies ranging from automotive, pharmaceuticals, chemicals, machinery, and medical devices to mention but a few, there is no doubt companies in the North West and Greater Manchester specifically could capitalise greatly on this new trade deal.
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