Negotiations between Australia and the United Kingdom for a Free Trade Agreement (FTA) have commenced, with the goal to make goods from the UK cheaper for Australian consumers and vice versa.
According to Federal Trade Minister Simon Birmingham, the FTA will support the COVID-19 economic recovery and will contribute to job creation and economic growth for both nations.
The two countries already have a significant economic connection: in 2019 the UK was the second-largest investor in Australia and was the second-largest recipient of Australian investment.
Trade Map data shows Australia exported US$10.47 billion to the UK last year, with the market representing around 1 per cent of our country's total exports.
The lion's share is made up of gold, pearls and gems, followed by lead, medical equipment and alcoholic beverages (mostly wine).
Last year Australia purchased around US$5 billion worth of goods from the UK with key products including machinery, vehicles, pharmaceutical products and Scotch whisky.
Birmingham hopes the FTA will be a "modern agreement", with a specific focus on digital trade and innovation and should deliver outcomes for SMEs that already sell goods and services to the UK.
At the same time the UK is also negotiating a similar agreement with New Zealand.
UK Prime Minister Boris Johnson (pictured) is particularly excited about the potential of a deal, especially with regard to the UK being able to access iconic Australian goods like Vegemite and Tim Tams.
"There are few countries in the world who share a closer friendship than Australia and the UK," says UK PM Johnson.
"Think of the potential we have. I want a world in which we send you Marmite, you send us Vegemite."
"We send you Penguins and you send us, with reduced tariffs, these wonderful Arnotts Tim Tams. How long can the British people be deprived of the opportunity to have Tim Tams at a reasonable price?"
Australian Trade Minister Simon Birmingham says the FTA will be a major component of both nations' COVID-19 economic recovery, making it easier for businesses to export and access goods, services and capital.
There are few countries in the world who share a closer friendship than Australia and the UK.Boris Johnson #StayAlert (@BorisJohnson) June 17, 2020
Now, as an independent trading nation for the first time in decades, we have the opportunity to turn our shared history and friendship into a world-leading free trade agreement. pic.twitter.com/PPWESs3aHq
"The Australian Government looks forward to negotiating an ambitious and comprehensive free trade agreement with the United Kingdom, a close friend and an important trading partner," says Birmingham.
"We will pursue a deal that opens up new opportunities for our farmers, businesses and consumers, supports job creation and strengthens our economies as we recover from the impacts of COVID-19.
"As like-minded champions of free trade, the FTA will also signal our shared commitment to global trade liberalisation and the rules that underpin it."
The first round of negotiations will commence on 29 June in a virtual format, with the Australian FTA negotiating team to be led by Elisabeth Bowes, Chief Negotiator, Regional Trade Agreements Division, Department of Foreign Affairs and Trade; and the UK negotiating team will be led by Vivien Life, Director, Asia & Australasia Negotiations Directorate, UK Department for International Trade.
Business News Australia
Get our daily business news
Sign up to our free email news updates.