Britain is ideally placed to secure a services-based trade agreement with Australia, the country’s trade minister said yesterday.
Australia was the first country out of the blocks to announce that it wanted to secure preferential access to British markets after the Brexit vote. Liam Fox, the trade minister, and Steven Ciobo, his Australian counterpart, have begun preliminary talks to enable them to hit the ground running once Britain formally leaves the European Union.
In a boost for the government’s plans to forge new trading pacts, Mr Ciobo told The Times that the two countries’ common cultural heritage would allow them to come to an arrangement easily.
The services sector represents 80 per cent of the British economy, but trade deals in regards to services are difficult because many nations are loath to open their markets to overseas competition.
“My starting point, given the maturity of the UK economy, is that we should push for as few barriers to trade as possible and that driving for an outcome of liberalised trade that enables both countries to play to their competitive strengths is going to yield the greatest results,” Mr Ciobo said.
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“I have indicated as part of my broad outline for us as a service economy — it’s 75 per cent of our GDP — that we have tremendous scope to have a very strong services relationship.”
Theresa May mentioned Australia in her speech outlining her Brexit objectives on Tuesday, saying: “We want to get out into the wider world, to trade and do business all around the globe.”
However, economists have warned that the “gravity” effect of trade means that deals with geographically closer economies are worth more.
Mr Ciobo struck a similar tone to his New Zealand counterpart in hinting that Australia would not look favourably on attempts to protect British farmers through subsidies or quotas. “I don’t have a starting point of offensive and defensive interests,” he said. “Certainly all the indications from prime minister May and others are that the UK shares that outlook.”
Dr Fox will attend an informal World Trade Organisation meeting of trade ministers in Davos tomorrow.