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OVER THE PAST days, we have heard numerous British politicians, starting with Prime Minister Boris Johnson, say that they are now preparing to leave the EU on ‘Australian-style terms’.
It sounds nice and many people in the UK have an understandable affection for Australia, but what does it mean?
In short, not much.
Australia does not have a free trade agreement with the EU. Indeed, Australia and the EU are currently entering the ninth round of negotiations to try to reach an agreement on a free trade agreement.
Both the EU and Australia recognize that the current situation is not optimal and needs to be improved.
What exists is simply a framework agreement that was finalized in 2017, building on an agreement in 2007 that established a general principle of cooperation in areas such as trade, foreign policy, security, development, and humanitarian issues.
A little too complex
As they work to reach an agreement, the EU and Australia mainly operate under the rules of the World Trade Organization (WTO), with heavy tariffs on imports and exports.
On customs, Australia and the EU have committed to “examining the possibilities of simplifying customs procedures”.
Regarding trade, the agreement commits both parties to try to reduce “technical barriers to trade”, but with tariffs.
They have a specific wine trade agreement, which came into effect in 2010, which safeguards the EU wine labeling regime and provides full protection for EU GIs so that Australian wine producers cannot use names like Champagne. , port and sherry.
Minor agreements exist, such as allowing Australia to participate in EU crisis management operations, while EU passenger name records are transferred to Australian border authorities to help fight crime and terrorism.
There are very few countries in the world that trade with the EU solely on the terms of the WTO, beyond Australia there are also Afghanistan, Somalia and the Islamic Republic of Mauritania.
Any of these would be an accurate description of what a no-deal Brexit would look like in January, but we won’t hear that from those pushing Brexit at any cost.
Whats Next?
WTO rules would mean that tariffs would be imposed on products entering the UK from the EU and vice versa. The latest tariff extends to about 326 pages of items ranging from beef to drugs to computer parts. Irish milk, for example, would cost 30% more in the UK as of January 1.
Furthermore, the UK has a large market for services and under an Australian-style arrangement, it would lose all preferential access to EU markets. Also noteworthy is the volume of trade.
The EU is the UK’s largest market, Australia is a very small market for the EU. Geography matters when it comes to commerce and Sydney is almost 17,000 kilometers from Brussels.
There is a Brexit agreement between the EU and the United Kingdom, it is in everyone’s interest to reach an agreement and time is running out.
No news is bad news
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That is where the focus should be. A no-deal Brexit, whatever it’s called, will be bad for everyone, but the country that will suffer the most will of course be the UK.
Neale Richmond is a Fine Gael TD for Dublin Rathdown and is a former Seanad spokesperson on EU affairs for the party.
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