Prime Aussie steak in your local restaurant? Jars of Vegemite in the local Sainsbury’s? Possibly. But at least one benefit from the new trade deal with Australia is almost certainly cheaper wine from Down Under.
Liz Truss, the trade secretary leading Britain’s post-Brexit charge out into the world, on Friday finished two full days negotiating with Australian Trade minister Dan Tehan on what both sides have declared as “the vast majority of elements of a comprehensive free trade agreement”.
The details are secret and need to be formally agreed at the G7 meeting in Cornwall in June but it is likely that it will mean – for example – Australian sparkling wine, which continues to carry a tariff of 20p a bottle from when the UK was in the European Union, will fall in price.
“For British exporters, it will be easier to sell into the Australian market, and it will be easier for Australia to sell into the UK market. There are lots of fantastic Australian goods that we all enjoy. Australian wine for example,” she says.
The Australia trade deal, while worth a modest £900million a year to the UK economy, is significant because it is the first one to be negotiated from scratch since leaving the EU.
Ms Truss adds: “This is a very exciting moment for the UK. This will be our first deal that we’ve negotiated from scratch, since we left the European Union, and it’s a major step forward for global Britain.
“Australia is one of our greatest allies – they are friends and family to the United Kingdom. It is a comprehensive deal. It covers all of the UK economy and the Australian economy that’s going to bring more jobs and growth to both our countries.”
The hope is that the advanced terms of the new trade deal – when they are revealed – can be a template to speed up other similar arrangements with other countries. “Absolutely,” she says. “It will be the basis on which we negotiate our future agreements.”
There was some ‘Ashes-style’ sledging in the newspapers before the talks between Ms Truss and Mr Tehan started, when allies of Ms Truss accused Mr Tehan of being “inexperienced compared to Liz”.
The comments prompted bemusement in Canberra, with an Australian minister accusing the UK of “sledging” – a term used to describe intemperate language on the cricket square – and saying the comments were “just the Brits gobbing off”.
Ms Truss now wants to move on, saying: “We gave Dan a very warm welcome to the United Kingdom and he has been an absolutely fantastic person to work with.
“He’s very straight-talking. He’s very warm and friendly. Of course, during the negotiations I fight hard for UK interests but, ultimately, what this agreement is about is agreement between two friends.
“We want to become closer, we want to become economically closer – we want to work more closely together.”
The hope now is that the Australian deal can lead to the Big One – Britain formally joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the £9 trillion free trade area in which Australia is a key player.
Joining this trading bloc of 11 countries around the Pacific Rim – others include Canada, Mexico, Peru, Chile, New Zealand, Brunei, Singapore, Malaysia, Vietnam and Japan – would be seen as a crucial counterweight to China and its trade practices.
Ms Truss adds: “That part of the world is growing very fast. One of our strategic ambitions is to reach beyond Europe and to trade more with the fastest growing parts of the world.
“Australia is a key economy in the Asia Pacific that is part of the CPTPP, which we’re currently applying for entry to. Doing this deal with Australia is another stepping stone to CPTPP accession.”
Ms Truss hopes the UK can join the CPTPP next year. The next step is for an Accession Working Group to be established, with formal negotiations starting by June.
Ms Truss says she does not want “to set an exact deadline” but she hopes that the UK could join this mega-trading agreement within the next 12 months.. “That would be fantastic, to be able to do that in 2022,” she says.
She adds: “We’ve already done deals with Canada, Mexico, and many of those CPTPP nations so this is another step towards that broader access to one of the fastest growing parts of the world.
“That’s where the future lies for British business, whether it’s the whisky industry, the car industry, our fantastic financial services or digital industries, that’s the fastest growing part of the world. And that’s why we need more access to those markets.”
Ms Truss wants British businesses to step up and take advantage of the opportunities offered by the trade deals she is striking, such as agriculture which is covered by the UK-Australian arrangement.
She says: “What I would say to UK farmers is that we have huge opportunities. It is global. We’ve got the ban removed from British beef into the United States….
“We got the beef ban removed from Japan as well. And there is a growing market for these high quality products that Britain produces.
“We’ve got incredibly high standards in animal welfare and in the environment, and more people want to buy those kinds of goods so – I think there’s a really positive future of British farming.”
The Department for International Trade has just launched a campaign called ‘Open Doors’ to help farmers and food producers start to export.
Ms Truss says British farmers can learn from those Down Under. She says: “Australia is a very good example of a country which sells its beef mainly into the Asian market, which is obviously closer to Australia. They’ve shown what can be done and I want British farmers to have those types of opportunities as well.”
The UK is likely to join the CPTPP before agreeing the long hoped for trade deal with the USA. Nevertheless, Ms Truss has made tentative moves on this front by working with Commerce secretary Gina Raimondo to remove tariffs on British Steel and whisky.
She says: “We are working on our broader trade relationship. I hope to go out to the United States soon to be able to move that forward.”
For Ms Truss, the global trade treadmill never ends. She had to break off the Australian talks last week to hold discussions with her Indian counterpart, after Boris Johnson’s trip to Delhi was cancelled because of the spiralling Covid-19 crisis there.
“There’s a world of opportunity. It shows what we can do now we’re outside the EU because we’ve got the freedom, the flexibility to negotiate to the benefit of British business,” Ms Truss says.