Chronic. Nearly five years after the Brexit referendum (June 23, 2016), the UK seems to be close to reaping its first benefits. A free trade agreement with Australia is about to be concluded. “We are in the sprint stage, and the goal is to reach an agreement in principle at the beginning of June.”, Confirmed as May 19, Wednesday, British Secretary of State for International Trade Liz Truss (Liz Truss).
For Brexiters, who was obsessed with the possibility of signing free trade agreements with the rest of the world outside the European Union (EU) from the beginning, this symbol is powerful. If signed, the agreement will prove that their commitment to this internationalized United Kingdom “Global Britain” is not entirely meaningless.
However, this first specific case makes it possible to gauge the extreme difficulties the United Kingdom is facing. It encountered two grim realities.
The first and most obvious point is that Australia is far away: to be precise, the distance between London and Canberra is 17,000 kilometers. As a result, trade is relatively limited: Australia accounts for 0.4% of British merchandise exports and 1.3% of imports. Through the recognition of the British government that runs the model, the agreement will increase gross domestic product (GDP)…between 0.01% and 0.02%. Triple no.
Another harsh reality is the possible consequences of an agreement with Australia for British farmers. Australian beef is extremely competitive, and British breeders may not be able to resist it. Minette Batters, chairman of the Farmers Union (NFU), issued an alarm: “The free trade agreement with Australia will harm our agricultural industry and bankrupt dozens of beef and sheep farms.”