The United Kingdom formally commenced a free-trade negotiation with Australia and New Zealand, almost five months after its exit from the European Union (EU).
A report by Al Jazeera on Wednesday quoted Australia’s Trade Minister Simon Birmingham that the country started talks with the two parties as part of its diversification strategy amid its dispute with China.
The three countries have long planned the negotiations but deferred such until Britain departed from EU in January. For the UK, leaving the bloc paved way for deepening its ties with other global counterparts.
According to Birmingham, the proposed deal was a “strong signal of our mutual support for free trade”.
But even if a free-trade agreement is sealed, he said that trade volumes between the two countries are unlikely to return to the same level as in the 1970s or the period before the UK joined the European Economic Community.
“Australia will be looking to secure better market access for goods exports, especially in agriculture, and high-standard rules on digital trade and investment,” he was quoted as saying.
Trade with New Zealand
Meanwhile, a separate bilateral trade negotiation has already commenced between the UK and New Zealand.
UK High Commissioner Laura Clarke was quoted as saying that the bilateral talks with Britain made sense given its proposed trade deal with Australia which New Zealand has close economic ties with.
New Zealand Trade Minister David Parker said that Wellington was pleased to be one of the UK’s chosen countries to have a free-trade agreement with after its exit from the EU.
During his announcement of formal negotiations, Parker said that he hoped the deal would open up new opportunities for regional communities, small- and medium-sized businesses, as well as Maori exporters.
New Zealand, Prime Minister Jacinda Ardern, while not mentioning the country’s dispute with China, said that she hoped Wellington would broaden its range of trading partners.
“Our policy in the here and now is to strengthen New Zealand’s economy and resilience through diversification,” she was quoted as saying by Al Jazeera.
Last year, Australian exports to China were worth about $103 billion, while New Zealand’s outbound goods totalled to $11 billion.
At present, the UK is New Zealand’s sixth-largest trading partner, with two-way trade amounting to $3.8 billion.
Meanwhile, two-way trade between Australia and the UK was at $20 billion from 2018 to 2019, making Britain Australia’s seventh-largest trading peer.