The UK and Australia have agreed on the main elements of a free trade deal, prime ministers of the two countries have announced on Tuesday.
London said that the “fundamentally liberalising” deal will eliminate tariffs on all UK goods and boost jobs and businesses across the country. UK citizens under the age of 35 will also be able to travel and work in Australia more freely.
The agreement also covers collaboration on defence and technology.
Prime Ministers Boris Johnson and Scott Morrison discussed outstanding issues of the agreement over dinner at 10 Downing Street on Monday evening after Johnson hosted the Group of Seven leaders in Cornwall, England.
The deal is the first deal that the UK government has negotiated from scratch after Brexit on top of its continuity deals.
According to the UK’s Department for International Trade, the deal will help expand the trade relationship between the two commonwealth countries, which was worth £13.9 billion ($19.57 billion) in 2020.
British cars, Scotch whisky, biscuits, and ceramics can be sold tariff-free in Australia.
British farmers are assured that there will be a cap on tariff-free imports for 15 years, using tariff rate quotas and other safeguards, and the government pledged to help farmers sell overseas, including to new markets in the Indo-Pacific.
London said the deal is “a gateway into the fast-growing Indo-Pacific region” and a boost to the UK’s bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
CPTPP is a landmark 11-country trade deal that includes Australia, New Zealand, Canada, Japan, Mexico, Singapore, Vietnam, Brunei, Chile, Malaysia, and Peru.
Johnson said that the deal “opens fantastic opportunities for British businesses and consumers, as well as young people wanting the chance to work and live on the other side of the world,” and that it “marks a new dawn in the UK’s relationship with Australia, underpinned by our shared history and common values.”
Julian David CEO of techUK, Julian David, said the deal “has the most advanced digital trade provisions of all the deals the UK has signed so far, opening up opportunities for our innovative businesses operating in emerging technologies, such as AI and cleantech.
He also applauded “the free flow of data provisions and the ban on data localisation,” which he said will allow the UK’s small and medium enterprises “to explore the market without the cost of having to set up servers.”
“We are looking forward to working with our industry and the government to make sure the sector takes full advantage of these state-of-the-art digital trade provisions,” he said.
A final Agreement in Principle will be published soon for Parliaments to scrutinise.
Alexander Zhang contributed to this report.