The UK may end up with an ‘Australia-style’ trade deal after Brexit - what Boris Johnson said

Friday, 16th October 2020, 1:44 pm
Updated Friday, 16th October 2020, 1:44 pm

After negotiations with the European Union failed to culminate in an agreement over the last few days, Prime Minister Boris Johnson has said the United Kingdom must prepare for a ‘no deal’ Brexit.

Speaking to broadcasters on the morning of Friday 16 October, he commented, “From the outset we were totally clear that we wanted nothing more complicated than a Canada-style relationship based on friendship and free trade. To judge by the latest EU summit in Brussels, that won’t work for our EU partners.”

Johnson said the talks appeared to “explicitly to rule out a Canada-style deal”, forcing the PM to conclude “that we should get ready for January 1 with arrangements that are more like Australia’s based on simple principles of global free trade.”

But what does that mean for the UK? Here is everything you need to know.

What is an Australian-style deal?

One big thing to bear in mind here is that when Johnson says “Australian-style deal”, he essentially means “no deal”, at least in terms of free trade.

Australia does not have a comprehensive deal with the EU, and, while it’s true that the country has been negotiating to secure one since 2018, for the time being the majority of Australia’s trade is undertaken according to World Trade Organisation (WTO) rules.

The same would be said of the UK in the event of a no deal Brexit.

It could be argued that the Prime Minister’s talk of getting ready for “arrangements that are more like Australia’s”, boils down to him saying “prepare for a no deal Brexit,” without using semantics that could turn off supporters.

Does Australia have anything to do with the EU?

In fact, approaching the same argument from the other angle, a no deal Brexit would be much more of a drastic departure than if the UK was able to secure an Australia-style deal. That’s because, while Australia operates its much of its trade under WTO rules, it does have some agreements in place with the EU.

A 2017 agreement between the two sides establishes general principles of cooperation on a wide range of areas, including trade, foreign policy and security, and development and humanitarian issues, among others.

In terms of national security, an agreement reached in 2015 allows Australia to participate in EU crisis management operations, and in 2012 the two parties reached an agreement on the transfer of EU passenger-name records to Australian authorities to help combat crime and terrorism.

An EU-Australia agreement allowing the exchange of classified information entered into force in 2011, and there are also other agreements on the peaceful use of nuclear energy and scientific cooperation.

Where the two parties do have a trade agreement is with wine - a deal was struck in 2008.

Were the UK to leave the EU with no deal in place, it would not have access to these kinds of agreements, and the impact would not be limited to trade in goods.

No deal would mean cutting all formal bilateral ties with the EU, including in crucial areas like judicial and police cooperation. The only bilateral agreement that would be in place between the UK and the EU would be the Withdrawal Agreement.

What else did Johnson say?

The Prime Minister announced that Brussels would not give Britain the kind of deal he wants, and insisted that, unless that changes, there would be no agreement. His comments came after the two sides failed to find terms in time for his self-imposed deadline of 15 October.

“If the EU comes back ‘with a fundamental change of opinion’ then the UK will listen but that doesn't sound likely after the summit,” Johnson said.

The PM explained that, with just 10 weeks left until the end of the transition period, he “had to make a judgement” on the likely outcome if talks continue.

He continued, "Based on simple principles of Global free trade, and we can do it, because we always knew that there would be change on 1 January whatever type of relationship we had.

”We are willing to discuss the practicalities with our friends, where a lot of progress has been made on such issues as social security, aviation, nuclear cooperation, etc.”

Johnson said it is “clear” the EU “are not willing unless there is some kind of change of approach to offer this country the same terms as Canada,” and said Britain would "embrace the alternative” with “high hearts and high confidence.”
