The commercial conversations of Great Britain with Australia are showing some of the difficult counterparts facing the country after leaving the European Union.The reduction of tariffs with its old colony would only contribute a little more growth, it would cost agricultural jobs in the United Kingdom and establish a challenging reference point for negotiations with other countries.
A commercial agreement would be a retouching rather than a revolution.The United Kingdom and Australia already trade a lot despite the absence of a bilateral agreement.Great Britain sends mostly cars, medications and clothing, and imports metals and alcohol.British exports to Australia were just over 12,000 million pounds (14,000 million euros) in 2019, almost three times more than in 2000.
However, lowering tariffs could bring benefits.Australia could export more cheap meat to British consumers.In return, Canberra could lift the barriers to the financial services of the United Kingdom.But the benefits are insignificant: the British government calculates that reducing zero tariffs and cutting non -tariff barriers to half would only increase British GDP by 0.02%.The true advantage is political: London would demonstrate that he can close commercial agreements now now that he has abandoned the European Union.
The drawback is that there are some very clear losers.Australian, largest and most efficient agricultural farms would reduce the offer of the British, which would mean a net loss of agricultural jobs in the United Kingdom.This would affect rural areas, which the government has committed to support, as well as Northern Ireland.
Prime Minister Boris Johnson could probably manage those costs.His government can steal tariff reductions, support other types of agriculture or pay to recycle agricultural workers.The problem is that Johnson has so far been reluctant to recognize Brexit's counterparts.He is obliged to disappoint some supporters.
The most important issue is how an agreement with Australia affects possible commercial agreements with larger countries.He could help Great Britain to join the CPPPP Asian commercial block (Transpacific Economic Cooperation Agreement), promoting Johnson's claim to be a paladin of world free trade.But countries like the United States and Brazil would require similar conditions, with a greater impact on the work of the United Kingdom.
However, Johnson does not have many options.He has to demonstrate that he can negotiate new commercial treaties.His greatest hope can be to a quick pact with Australia, followed by a more general Asian agreement, even if that means renouncing concerts with the United States.
The authors are columnists of Reuters BreakingViews.Opinions are yours.The translation, by Carlos Gómez below, is a fourty responsibility
