Boris Johnson has agreed the broad terms of a free trade deal with Australia, the first negotiated from scratch since Brexit.
The Prime Minister said it marked a “new dawn” in the UK’s relationship with Australia, with British products like cars, Scotch whisky and biscuits set to be cheaper to sell in the tariff-free agreement.
The deal is a major symbolic victory for Mr Johnson, as it is the first to be built completely from scratch since Brexit.
However, the Department for Trade admitted the deal would boost GDP by £500 million over 15 years – just 0.025%.
Downing Street also said the removal of tariffs would “save households up to £34million a year” on goods like Jacob’s Creek and Hardys wines, swimwear and confectionary.
There are an estimated 27.8million households in the UK, suggesting No10’s mooted saving is worth around £1.22 per household per year.
Asked if that was worth celebrating, Boris Johnson’s official spokesman said: “What we are celebrating today is the first major trade deal negotiated from scratch by the government since we left the EU.
“It will benefit British businesses, it will benefit the public and it will provide opportunities for young people where those opportunities weren’t there before. It’s clearly a good thing for the British public.”
At the same time, Mr Johnson is poised to embark on a trade war with the EU, the UK’s biggest trading partner, over Northern Ireland border issues.
Trade with the European single market represents 51.6% of all UK imports and 53% of exports.
No10 insisted there will be wider benefits for the whole UK, beyond simply savings on supermarket goods – and they could include Brits going overseas to work in the country.
Downing Street said Brits under the age of 35 will be able to travel and work in Australia more freely.
And they later confirmed farm work requirement on working holiday visas would be scrapped.
Asked why the UK didn’t “push harder” to make the new freedoms apply to under 40s – as originally expected – rather than under 35s, the spokesman said: “That’s not how I’d characterise it.
“This is a success for the British people. It’s simply factual that previously these opportunities didn’t exist and now they do thanks to this trade deal.”
Boris Johnson, who agreed the pact over dinner with Aussie PM Scott Morrison, said: “Today marks a new dawn in the UK’s relationship with Australia, underpinned by our shared history and common values.
“Our new free-trade agreement opens fantastic opportunities for British businesses and consumers, as well as young people wanting the chance to work and live on the other side of the world.”
The pair announced the agreement – the full details of which will only be released in the coming days – despite concerns from farmers on both sides over the deal.
Industry leaders have spoken out over possible compromises on food standards, while farmers fear they could be undercut by cut-price imports.
As a compromise, Downing Street said there will be a cap on tariff-free imports for 15 years under the deal.
Other “safeguards” will be brought in to protect British farmers.
It’s thought the final document will include a “full chapter” on animal welfare in the final deal, and another on environmental protections.
But No10 wouldn’t be drawn on the specifics of what would be in them, other than that saying they would “not compromise” the UK’s animal welfare standards.
Number 10 said the new deal will help distillers by removing tariffs of up to 5% on Scotch whisky.
Elsewhere, car manufacturers in the Midlands and North of England will see tariffs of up to 5% cut, the statement added.
There has been some initial praise for the agreement.
Darren Caplan, Chief Executive of the Railway Industry Association, said: “It should mean more access to government contracts and mutual recognition of professional qualifications, and also allow UK professionals to work in Australia more easily.”
But William Bain, Head of Trade Policy at the British Chambers of Commerce, said: “Businesses will welcome this Agreement in Principle as a step forward. However, there is a long way to go before the signing and implementation of a free trade deal. It should also be pointed out that trade with Australia represents only around 1.2% of the UK’s total, so whilst a deal will have welcome benefits it will not offset the ongoing issues with trade to the European Union.”
Jean Blaylock of campaign group Global Justice Now claimed: “This trade deal looks set to sacrifice farmers, food standards, and our climate ambitions for the sake of a photo opportunity.”
She added: “The government must publish the full text of this deal.
“There is no valid reason for a democracy to sign up to a far-reaching trade deal bound in international law without proper scrutiny.
“Liz Truss cannot expect farmers, climate campaigners, and the public to blindly follow her into this deal like the pied piper of Hamlin.”
International Trade Committee Chair, Angus Brendan MacNeil MP, said: “The UK and Australian negotiating teams have worked hard to reach this agreement in principle and it’s encouraging to see the Aussie appetite for our products.
“While the devil will be in the detail, and the prospect of increased trade with Australia is welcome, it cannot be on their terms or to an Australian tune.
“In its rush to reach an initial agreement, I fear the Government could sign up to something which brings significant harms as well as benefits.”
Joe Spencer, partner at accountancy network MHA MacIntyre Hudson, added: “Farmers are right to be wary.
“Trade deals of the sort the government has negotiated with Australia offer few advantages to the sector and maybe only small benefits to consumers (in terms of lower prices).”
Boris Johnson told reporters the deal will “benefit British farmers”, adding: “It will be good news for British car manufacturers, it will be good news for British services, for British financial services and it will be good news for the agricultural sector on both sides.
“Here, we had to negotiate very hard and I want everybody to understand that this is a sensitive sector for both sides and we’ve got a deal that runs over 15 years and contains the strongest possible provisions for animal welfare.
“But I think it is a good deal and I think it’s one that will benefit British farmers and British consumers as well. It will also make it easier for British people, for young people to go and work in Australia.”
Australian Prime Minister Scott Morrison said the trade agreement is a “pathway” for the UK to join other partnerships across the world.
Mr Morrison, speaking at Downing Street, said: “Our economies are stronger by these agreements, this is the most comprehensive and ambitious agreement that Australia has concluded.
“The only one that comes into close connection with that is the relationship we have with New Zealand.”
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