Australians could soon enjoy cheaper Scotch and more affordable Bentleys, after the federal government announced formal negotiations over a free trade deal with the United Kingdom had begun.
The agreement will seek to remove costly tariffs imposed on the goods Australia imports from the UK – predominantly alcohol, British-made cars and medications.
And in good news for customers, the removal of those tariffs could mean as much as a 5 per cent discount at the cash register, according to Australian British Chamber of Commerce chief executive David McCredie.
“There’s a 5 per cent tariff on Scotch whisky, a 5 per cent tariff on British motor vehicles, your Range Rovers or Jaguars for example,” he said.
“There’s tariffs of around 5 to 8 per cent on a whole range of products we import from the UK.”
Mr McCredie said it’s not just consumer goods affected by these tariffs, either.
Some of the parts used in Australian rail networks are also imported from the UK and incur an 8 per cent tariff that is ultimately borne by taxpayers.
“There’s no real point in putting tariffs on things that you’re only going to pay for in the end anyway,” Mr McCredie said.
UK consumers will also benefit from cheaper prices, with Prime Minister Boris Johnson excitedly informing the nation that Australia’s iconic Tim Tams will soon be considerably cheaper to buy.
“I’m absolutely thrilled today to be inaugurating the UK-Australia, Australia-UK free trade talks,” he said.
How long can the British people be deprived of the opportunity to have Tim Tams at a reasonable price?”
Strengthening a strong bond
The UK is already a major trading partner for Australia, with two-way trade between the countries worth $26.9 billion in 2018.
That places the outgoing member of the European Union as Australia’s eighth-largest two-way trading partner.
The commencement of formal negotiations follows years of preparations after the UK announced its plans to leave the EU, as it was legally unable to negotiate with Australia while still a member of the union.
Now, the two nations have formed a trade working group that Trade Minister Simon Birmingham said helped to “get the ball rolling as soon as possible”.
“We have thrown the kitchen sink at being in the best possible place to commence negotiations. Today we take the next step,” he said.
“Australia will be looking to secure better market access for goods exports, especially in agriculture, and high-standard rules on digital trade and investment, to expand our already deep economic relationship.”
Australia’s main exports to the UK are gold, wine, pearls, gems and lead, which collectively accounted for more than $2 billion in exports in 2018.
Labor throws support behind agreement
Labor MP Madeleine King – the shadow trade minister – welcomed a free trade agreement with the UK, but said the opposition would keep a close eye on how the agreement is constructed.
“As with all trade agreements, it is important that this free trade agreement is in the best interests of Australian workers, Australian business and the entire Australian community,” she said.
“We will work constructively with the federal government on this.”