Australia puts deal with EU ahead of talks with Britain

by Charlie Mitchell | 07.09.2016

In the wake of the cold water poured on Britain’s post-Brexit prospects by Japan and the US at the G20, Brexiteers have been trumpeting the fact that Australia wants an early trade deal with us. However, Australia’s trade minister has now made clear not only that negotiations on a deal will have to wait until Britain’s EU divorce proceedings are concluded, they will play second fiddle to an Australia-EU free trade agreement (FTA).

At a G20 bilateral meeting, Australian prime minister Malcolm Turnbull declared his intentions of “getting in to deal with the British early”. Asked whether a deal could be concluded in the current Australian parliamentary term, which can last at the most another two years and nine months, he replied, “absolutely”. But his trade minister Steven Ciobo has undermined Turnbull’s comments on a UK visit.

During an interview on the BBC’s Today Programme this morning, Ciobo predicted that UK-Australia negotiations would start in around two and a half years, assuming Article 50 is triggered in the first or second quarter of 2017. This is because we can only have formal trade talks once we leave the EU.

The trade minister confirmed that “preliminary” discussions could take place before that. Indeed, Liam Fox, our international trade secretary, and Ciobo have agreed that officials will meet twice a year to discuss a post-Brexit FTA. But with formal negotiations beginning in 2019 at the earliest, it is hard to see a deal being concluded on Turnbull’s timetable.

Meanwhile, Australia will begin formal talks with the EU in early 2017, following an agreement to work towards an FTA last November. Ciobo said that these “more advanced” talks will come first and a scoping study will report back in the New Year (listen from 1’35” mark). Thus while Britain manoeuvres its exit, Ciobo expects to be “well and truly engrossed in negotiations” with Europe.

Trade is currently conducted under the 2008 EU-Australia Partnership Framework. Total trade in goods and services last year between Britain and Australia was only £13 billion – compared with £513 billion trade between Britain and the rest of the EU.

This trade between the UK and Australia would be boosted by the planned comprehensive Australia-EU FTA – designed to remove barriers to trade in goods and services and expand investment – if Britain stayed in the EU. But it now looks as though Britain will quit the EU around the time that Brussels concludes its Australian FTA and we will then have to wait for our own deal. This is hardly the victory many have crowed about.

Edited by Hugo Dixon

One Response to “Australia puts deal with EU ahead of talks with Britain”

  • Comments in the Independent & Guardian yesterday had exit people writing about how biased those papers are against the exit. The exit people seem to think ‘happy to discuss trade’ as only one step away from an actual agreement.