Australia deal could create ‘negotiating difficulties’ in future

LONDON: The UK may have set a precedent with Australia which could create “negotiating difficulties” for future trade agreements, an expert has said.

Westminster’s first trade deal negotiated from scratch post-Brexit was announced on Tuesday. Cabinet Office minister Michael Gove said trade deals with different countries will be “bespoke” and “appropriate to particular circumstances”. He warned that other countries should not imagine that the government “will be anything other than determined to get the best deal” for Britain’s producers and consumers when it comes to negotiations with them.

But associate professor Mark Melatos from the University of Sydney’s school of economics has warned the UK may have created problems for itself as it looks to reach similar pacts with Brazil, South Africa and, most importantly, the US.

“Politically, the UK needed to demonstrate that it could conclude bilateral trade agreements post-Brexit, albeit with a very close friend in Australia,” Melatos told the PA news agency.

“Concluding the first agreement is also useful because it may encourage other trading partners to come forward and start negotiating since they now will have some visibility as to what kinds of concessions can be expected from the UK post-Brexit.

“On the other hand, this deal sets a precedent for later, likely more complicated, deals the UK negotiates. Any concessions granted now to Australia will form a baseline for the start of future negotiations with the US or the EU.”

The idea of a precedent was particularly relevant to any concessions on human movement, on mutual recognition of professional qualifications or around agricultural imports into the UK, Melatos said.

“Any concessions on these issues are likely to create negotiating difficulties down the track when the UK is negotiating agreements with more substantial trade partners,” he said.

Talking to BBC Radio 4’s Today programme, Gove described International Trade Secretary Liz Truss as a “tough” and “shrewd” negotiator who will be looking at “what’s best for Britain” in discussing deals with other countries.