Britain and Australia announced a free trade deal on Tuesday which the British government hailed as an important step in building new trade relationships following its departure from the European Union.
The pact, which will eliminate tariffs and red tape, was hailed by British Prime Minister Boris Johnson as “a new dawn” in the two countries’ relations.
Johnson’s Conservative Party government views the deal as an important element of its post-Brexit strategy to shift the country’s economic centre away from Europe and seek out fresh opportunities in higher-growth Indo-Pacific nations.
Earlier deals with other countries, including Japan, were built on existing agreements struck by the 27-member bloc.
Australian Prime Minister Scott Morrison and Johnson overcame sticking points during talks after the G7 meetings in the UK, which Morrison attended as a guest.
The UK said the deal will mean products such as cars, Scotch whisky, biscuits and ceramics will be cheaper to sell to Australia, a former British colony.
It will also see UK citizens under 35 able to travel and work in Australia more freely.
The bigger economic prize could be the precedent the deal sets for freer access in trade that allows Britain's services sector to export financial, legal and other professional services.
"It is a fundamentally liberalising agreement that removes tariffs on all British goods, opens new opportunities for our services providers and tech firms, and makes it easier for our people to travel and work together," British trade minister Liz Truss said.
Though further details about the deal have yet to emerge, some official estimates say the agreement could add 500 million pounds ($705.7m) to UK economic output in the long term – a fraction for an economy worth around two trillion pounds ($2.8 trillion).
The deal will be scrutinised by British farmers, who fear they could be forced out of business if the deal eliminates tariffs on lamb and beef imports from Australia.
The UK said British farmers would be protected by a cap on tariff-free imports for 15 years, using tariff rate quotas and other safeguards.
Australian Minister for Trade David Littleproud told 4BC Radio the deal marked a “win for Australian agriculture”.
