Why a trade deal with Australia matters for Boris Johnson

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Lucy Fisher
·4 min read
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Liz Truss - Simon Dawson/No10 Downing Street 
Liz Truss - Simon Dawson/No10 Downing Street

The ability to pursue buccaneering free trade deals across the world was one of the core arguments in support of Brexit.

Since leaving the European Union, few targets for such a pact have looked more obvious than Australia: an Anglophone ally with close historical and cultural links to Britain, which is also relatively well-aligned in terms of standards.

Furthermore, its geographical location fits neatly with Boris Johnson’s tilt to the Indo-Pacific, a recognition of the growing economic might and geostrategic importance of the region.

Clinching the deal would finally provide grist to the Prime Minister’s much-vaunted vision for a post-Brexit "Global Britain", which critics snipe remains more a slogan than a policy at present.

In addition, it would be a symbolic triumph representing the first deal secured by the UK that was not simply a roll-over of existing agreements with EU trading partners.

On the flip side, since Australia is viewed as the most straightforward major economy with which to agree a trade deal, failure to strike a pact would be viewed as an ominous sign. Whitehall insiders fear it would spell doom for an array of other desired deals, including with the United States.

As one Government source put it to The Telegraph: "This is a fundamental debate about what we want Global Britain to be. If we can’t get Australia over the line, then we’re partly accepting our centre of gravity still revolves around Europe." The stakes are therefore high.

The talks have entered the last rounds of wrangling, but the hardest parts - as is customary - have been saved until the end. For the UK, the main stumbling block is Australia’s demands on agriculture.

British farmers are furious at the prospect of Australian farmers potentially gaining zero tariff, zero quota access to the UK market for their beef, lamb and sugar.

Here again the politics of the prospective trade deal intersect with Brexit, with farming unions insistent that the UK’s departure from the European Union was meant to untie the Government’s hands so it could boost domestic agriculture rather than hand other nations the ability to flood the market.

There is particular alarm at the impact of a UK-Australia deal on the Union too, since it is feared that rural Scottish and Welsh hill farms could be worst affected by meat imports.

Champions of a zero tariff, zero quota approach point out that since Australia is 9,000 miles away, its farmers are unlikely to divert their goods away from Asia to Britain en masse.

However, sceptics caution that the crucial principle at stake is not to set a benchmark that would be exploited by other nations with larger and more powerful agrifood sectors - including the US and Brazil - when negotiating future trade deals.

On this point, an ideological split emerges between senior Brexit supporters. One side argues that the core reason behind leaving the EU was to bolster free trade and that driving down food prices for consumers should be welcomed.

The other side maintains that low prices are enabled only by poor standards, and that high quality food and British farmers should remain protected.

So far there has been strong appetite from both London and Canberra to secure a trade pact, with Australian trade minister Dan Tehan flying to the UK for face-to-face talks with UK International Trade Secretary Liz Truss last month.

June has been ear-marked as the landing zone for finalising a deal. In the ideal scenario, Australian Prime Minister Scott Morrison would be able to sign it while in the UK for the G7 summit in Cornwall.

Before that the Cabinet row must be resolved between Environment Secretary George Eustice and Cabinet Office minister Michael Gove on the sceptical side, and International Trade Secretary Liz Truss and Brexit minister Lord Frost, who support the terms requested by Australia along with some mitigating measures.

Ultimately, however, pressure is mounting on Mr Johnson to make the call. The Prime Minister must decide what terms he is willing to accept, and what kind of post-Brexit trading posture he wants to adopt.

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