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Prime Minister Boris Johnson the Foreign and Commonwealth Office, following a Cabinet meeting in September. PA
VOICES

Neale Richmond When Boris refers to an 'Australia-style' deal with the EU, he's talking through his hat

The trade arrangements in place between Australia and the EU are nothing like a free-trade deal, writes Neale Richmond.

OVER THE PAST few days, we have heard numerous British politicians, starting with Prime Minister Boris Johnson, saying 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 very much.

Australia does not have a free trade deal with the EU. Indeed, Australia and the EU are currently entering into the ninth round of negotiations in order to try to agree on a free trade deal.

Both the EU and Australia recognise that the current situation is sub-optimal and needs to be improved.

What is in existence is simply a framework agreement that was finalised in 2017, building on an agreement in 2007 that established a general principle of co-operation on areas such as trade, foreign policy, security, development and humanitarian issues.

A little too complex

While they work towards a deal, the EU and Australia operate mainly on World Trade Organisation (WTO) rules, with large tariffs on imports and exports.

When it comes to customs, Australia and the EU have pledged to “examine possibilities to simplify customs procedures”.

On trade, the agreement commits both sides to try to reduce the “technical barriers to trade” – but with tariffs.

They have a specific wine trade agreement, which came into force in 2010, which safeguards the EU’s wine labelling regime and gives full protection to EU geographical indications so Australian wine producers cannot use names such as Champagne, port and sherry.

There are minor agreements such as allowing Australia to participate in EU crisis management operations while EU passenger name records are transferred to Australian border authorities to help combat crime and terrorism.

There are very few countries in the world who trade with the EU solely on WTO terms, beyond Australia there is 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 who push Brexit at whatever cost.

What next?

WTO rules would mean tariffs would be imposed on goods coming into the UK from the EU and vice versa. The last tariff schedule runs to about 326 pages of items ranging from beef to medicines to computer parts. Irish milk, for example, would cost 30% more in the UK from 1 January.

In addition, the UK has a large services market and under an Australia-style deal, it would lose any preferential access to EU markets. It is also worth noting 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 trade and Sydney is nearly 17,000 kilometres from Brussels. 

There is a Brexit deal to be had between the EU and the UK, it is in everyone’s interests to agree one and the time is running out.

That is where the focus should be. A No-Deal Brexit, whatever it is 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 former Seanad spokesperson on EU affairs for the party.

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