UK-Australia Trade Agreements: The Current Status and Future Prospects

Australia has long been a significant trade partner for the United Kingdom, and as the UK transitions from its membership within the European Union (EU), questions have arisen about the future of trade agreements between these two nations. Currently, the UK and Australia have existing trade deals that are in the process of being 'rolled over,' ensuring a continuation of business as usual. However, negotiations for a comprehensive Free Trade Agreement (FTA) are in progress, and the situation with New Zealand is similar.

Current Status of Existing Trade Agreements

Previously, the UK had trade agreements with Australia within the EU framework, as well as outside of it. What is happening now is that both parties are working on 'rolling over' these existing agreements to save time in negotiations. This means that for the time being, the current business arrangements will continue as usual, without any significant changes.

No Unilateral Trade Agreements Yet

While there is a commitment to negotiate a comprehensive FTA, it is important to note that as of now, no definitive agreement has been reached. The situation with New Zealand is also the same. This is mainly due to the fact that EU member states are not allowed to negotiate unilateral trade deals with third countries. The European Commission has the sole authority to negotiate and finalise trade deals, not individual member states, including the UK, which remains in its transition phase.

In 2018, the European Union authorised the commencement of free trade negotiations with Australia and New Zealand. Any deals reached would require ratification by all 27 EU member states, as well as sometimes by regional parliaments. This adds a layer of complexity to the process.

Priority of EU-Australia Free Trade Agreement

When it comes to Australia’s current priorities, the focus is on finalising the FTA with the European Union. The one with the EU comes first due to the much greater market access it provides. Unless Australia is willing to 'roll over' the FTA it has with the EU (which is highly unlikely), the negotiations with the UK would take many years to conclude. This is due to the size and complexity of the EU market compared to the UK.

Key Takeaways

No definitive UK-Australia FTA is in place yet, but there is a commitment to negotiate one. The existing trade agreements are currently being 'rolled over' ensuring continuity of business operations. The UK must work within the EU framework for now, as individual member states like the UK cannot negotiate trade deals unilaterally. The prioritization of the EU-Australia FTA due to its greater market size and access. Further negotiations with New Zealand are also in progress, following similar dynamics.

These dynamics highlight the complex nature of international trade agreements and the importance of understanding the current and future prospects for trade between the UK and Australia. As negotiations continue, it remains crucial for businesses and stakeholders to stay informed about these developments to ensure they are well-prepared for any changes that may occur.