Aus-UK Trade Deal

At a Glance:

On the 17th of June 2021, Australia and the UK signed a historic trade deal. Now both nations are seeking an ambitious free trade agreement (FTA). Now whilst the UK is mainly looking at the FTA as the first step in entering the pacific market, Australia is looking at boosting its ties with the UK consumer market. Whilst the UK will benefit from exports of Whiskey, Cheeses and Cars. Australia benefits from an increase in Agricultural access and industrial products. For countries with broadly similar systems and ways of working, easing restrictions on UK Australian working visas is also a big pull.

The Good:

With over 1.25 million ex-pats living in Australia, a core winner here is the young job seekers, the gap year adventures, and the entrepreneurs. Greater access to both countries education systems, markets and cultures allows for knowledge sharing, growth of existing companies or the formation of new businesses as both countries seek to explore the wealth of development in the tertiary and quaternary sectors. A core focus is how these two island nations can establish conduits of data flow with established protections maintained for both consumers. This presents opportunities for the UK and Australian firms to challenge the might of Silicon Valley. With the greater access, this would provide for a greater prospect for both nations to share both the skills of their respective workforces and provide an opportunity for businesses to flourish. With the UK and Australia already sharing cultural heritage, a free trade agreement would remove red tape to provide essential growth in these emerging sectors. 

The Bad: 

Whereas the deal is primarily heralded as an outstanding achievement and part of Britain reentering the global fray, we also need to recognise its limitations. Now the UK is both known for an exceptional standard of food quality and animal welfare; however, the provision for our farmers is far less robust than other countries. The Australian trade deal for all its benefits for opening up both emerging sectors and new avenues for trade also sees Australia benefit from a new market to sell its livestock and arable produce to now this in itself is not a problem until we address the broader issues. The UK is legislating for greater protection for animals already providing protection in slaughterhouses with CCTV, actively working towards reducing life transport and generally improving welfare standards of stock. The issues from the fact that many in the sector myself included seeing cheap imports as a potential loss leader that UK farmers cannot compete against due to quality or regulatory pressures.  Now, this could be remedied by further intervention from the government to protect the British agriculture trade through additional reinforcement of subsidies which would continue to enable farmers security of revenue so that they can steward the environment. We also have to reflect on the recent pandemic where without these key workers within this sector, UK food prices would have soared, but subsidy should not be the only tool. Subsidy should be a support mechanism for farmers to innovate and explore further opportunities, not as the critical area to ensure their survival which is where in the future we are likely going to need more robust packaging from trends in carbon footprints and welfare standards to the origin of products.

The Ugly:

As with many areas of new policy areas, we are likely to see far further detail in weeks and months to come, and the benefit of this detail may undoubtedly outweigh any cons. However, areas that are already becoming abundantly clear are that any trade deal needs to add value to our stores and the public without costing our domestic sectors. We must recognise that this deal will essentially become the benchmark for future agreements with other countries such as New Zealand and the United States, and the standards we employ need to ensure we can maintain our quality. This is where we need to think about what governments and sectors can do to ensure the British made standard is and Union Jack products are promoted as other countries will be focusing on promoting their products and not seeing our own produce increasingly priced out of the market. Whereas some would certainly and often rightly articulate that the market would be the best moderator to ensure that successful products or produce survive, we need to recognise holistic benefits of what we are trying to achieve and whilst tariff provisions are a solution, they are not a silver bullet. We need to think of what can be done to ensure that we are giving the right information with a greater abundance of produce. Making sure products are more accurately labelled and those items have information consumers care about as we already see levels of information vary based on the intensity of farming or sustainability of materials we need to reflect this on the packaging in the stores. Place of origin is also crucial and must be clear as we are already aware larger producers such as New Zealand Dairy could potentially use the deal to enter the UK milk market and price pinched farmers further out. 

To conclude:

The free trade deal in itself overs various opportunities for a plethora of sectors to benefit from further collaboration with a country we share so much with; however, we need to recognise that the deal must benefit the UK holistically and not sole sectors. Agreements need to ensure various sectors can benefit from these new agreements offering avenues to enrich our great nation and not solely focus on metropolitan sectors to see growth for our country and the success of domestic programs. Part of the levelling up agenda needs to recognise the key industries around our nation and areas where we can grow, not token offers or caveats.