The United Kingdom and Australia have come to an agreement on “the vast majority” of a free trade deal, the two countries said.
The two sides aim to seal a deal by June, the countries said after talks on Friday in London.
“Both countries are confident the remaining issues will be resolved, and will now enter a sprint to agree the outstanding details with the aim of reaching agreement in principle,” the UK and Australia said in a joint statement after the meeting.
It has been estimated that £500m ($694m) will be added to the Gross Domestic Product (GDP) of the UK over the long-term because of the free trade agreement with Australia.
Even though there was no finalized deal on a trade agreement even on the final day of talks between UK International Trade Secretary Liz Truss and Australian Trade Minister Dan Tehan in London, both the sides confirmed that ironing out the outstanding issues standing in the way of an agreement will be done by them over the next few weeks.
The trade deal between the two countries “will help us emerge stronger from the pandemic, strengthening ties between two democracies who share a fierce belief in freedom, enterprise and fair play”, Truss said.
If the free trade deal between the two countries goes through, it will be the first trade deal after Brexit that would be successfully negotiated by the UK that will not be a “rollover deal” or a replica of a trading arrangement that was earlier negotiated by the European Union on behalf of the UK when the country was within the bloc.
The UK struck a free trade deal agreement with Japan in October 2020.
The main aim of a free trade agreement is to encourage trade – generally in goods but sometimes also in services. This is achieved by making the goods or services cheaper for consumers in the countries participating in the deal. A free trade agreement typically comes with reduced or no tariffs or taxes or charges imposed by governments for trading goods across borders.
Another aim of free trade agreements is to remove quotas which essentially are limits on the amount or quantity of a certain good that can be imported into a country.
It is also possible to make cross border trading much simpler when the rules governing trade are same in the trading partner countries such as the colour of wires in plugs. The closer the rules are, the less likely that goods need to be checked.
(Adapted from BBC.com)