The race between Australia and New Zealand to sign the UK’s next trade deal has been described as “neck and neck”.
However, Australian trade minister Dan Tehan will travel to the UK next week in a bid to break the deadlock in talks with counterpart Liz Truss’s team of negotiators, the Times reports.
Standards
Agricultural tariffs and standards are thought to be the major sticking points at present, with British farmers wanting Australian exports of products such as lamb and beef to match UK standards in areas such as hormone treatment.
The government estimates that a free trade deal could eventually increase British exports to Australia by almost £1 billion.
British trade with Australia in goods and services totalled £18.5 billion in 2019.
Pacific tilt
A deal with Australia could also further the UK’s ambition to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
In this respect, Tehan’s visit could be a tactic to put pressure on Britain to agree to a favourable trade deal with Australia to curry favour with an existing member of the bloc, according to David Henig, a former British trade negotiator and ex-assistant director at the Department for International Trade.
NZ deal close?
However, an ally of Truss has told the Sun it is “neck and neck” between Australia and New Zealand over who will first sign a deal with the UK, adding “there’s every chance a Kiwi deal closes first”.
UK-New Zealand trade talks have made “rapid progress” and a deal could lead to cheaper meat and wine imports.
An outline deal has been agreed which would slash tariffs on New Zealand produce entering the UK, including wine, lamb and beef.
The fourth and final round of talks with New Zealand begins this week.
Outline
Many goods from New Zealand entering the UK continue to attract a 20% import tax which is a legacy of the UK’s previous membership of the EU.
Post-Brexit, the UK will remove this duty if New Zealand cuts tariffs on exports including cars.
The talks are expected to last two weeks.
US talks lag behind
Talks for a trade deal with the US have slowed, however, with a comprehensive agreement thought to be low on President Joe Biden’s agenda.
“I have trouble seeing how the Biden administration makes this work in the next two years,” said Simon Lester, the associate director of the Center for Trade Policy Studies at the Washington-based Cato Institute, told Bloomberg.
“I don’t know why they’d want to bring it up with all the other things on their agenda,” he added.
Tariff suspension
Instead, progress on a permanent solution to the tariff dispute that has seen duties levied on UK products such as whisky, cashmere, and cheese is likely to be prioritised.
Tariffs that had been imposed as part of the long running dispute over aviation subsidies were suspended for a four-month period, starting in early March.
