“The free trade agreement between London and Canberra makes it possible to measure the extreme difficulties which await the United Kingdom with Brexit”

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Chronic. Almost five years after the Brexit vote (23 June 2016), the UK seems close to reaping its very first benefit. A free trade agreement with Australia is about to be concluded. “We are in a sprint, with the objective of obtaining an agreement in principle at the beginning of June”, affirmed, Wednesday, May 19, Liz Truss, the British Minister for International Trade.

For Brexiters, who have clung from the start to the possibility of signing free trade agreements with the rest of the world outside the European Union (EU), the symbol is strong. If signed, the agreement would prove that their promise of “Global Britain”, this internationally oriented United Kingdom, is not completely meaningless.

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This first concrete case, however, allows us to measure the extreme difficulties that await the United Kingdom. It comes up against two harsh realities.

GDP increase between… 0.01% and 0.02%

The first and most obvious is that Australia is far away: 17,000 kilometers between London and Canberra to be exact. Trade is therefore relatively limited: Australia accounts for 0.4% of UK goods exports and 1.3% of its imports. By the admission of the British government, which has run its models, this agreement would allow an increase in gross domestic product between… 0.01% and 0.02%. Three times nothing.

The other harsh reality concerns the consequences of a possible agreement with Australia for British farmers. Australian beef is extremely competitive and UK breeders may not be able to resist. Minette Batters, President of the Farmers Union (NFU), is sounding the alarm: “A free trade agreement with Australia will damage our agricultural industry and bankrupt scores of beef and sheep farms. “

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The problem divides the British government deeply. On the one hand, the supporters of free trade led by Liz Truss; on the other, farmers’ advocates, led by Michael Gove, an influential minister and early brexiter. According to the British press, the British government has asked Australia for a 15-year transition period, during which Australian beef would not have full access to the UK market. Canberra would be ready to accept ten years, still according to the same leaks in the British press.

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