As readers would be aware, both Australia and New Zealand have been pressing forward to complete Free Trade Agreements (FTAs) in the northern hemisphere, including FTAs with the United Kingdom (UK) and the European Union (EU). The need for separate FTAs was necessitated following the UK’s departure from the EU through the “Brexit” process.
While Australia and New Zealand have both been progressing these FTAs, that progress and the outcomes have not been identical. During the last week, there were significant developments for both countries, but neither were overwhelmingly positive.
The UKs failure to endorse the AUKFTA
Australia has already completed negotiations for an FTA with the UK (AUKFTA) meaning that both countries are now undertaking ratification and implementation processes. In Australia, that means that the AUKFTA will be considered by the Joint Standing Committee on Treaties (when it is reconvened) as the previous review had not been completed before Parliament was dissolved. A similar process of review by the International Trade Committee of the UK Parliament is being undertaken according to the UK Constitutional and Governance Act which gives UK MPs 21 “sitting days” to scrutinise the AUKFTA. Earlier this month, the UK Government initiated the process despite previously committing there would be “sufficient time for the relevant Select Committees to produce reports” beforehand. However, the preliminary outcomes of that review have not been positive and the first report of the cross-party Committee of UK MPs concluded that the failure to uphold the commitment had shown “great discourtesy” to Parliament. The Committee also called on the Government to extend the time for scrutiny failing which it recommended that MPs vote against ratification which would force an extension to the scrutiny period. While this no doubt reflects an opportunity to pressure an unpopular UK Prime Minister, it does cast some doubt on a smooth ratification and implementation process. It remains to be seen whether the UK Government adopts a similar approach to ratification of the FTA it has concluded with New Zealand.
New Zealand closes an FTA with the EU but not everyone is happy
On 30 June 2022, our New Zealand colleagues announced agreement to secure a completed comprehensive FTA with the EU well in advance of Australia’s negotiations with the EU. Details of the FTA are summarised here and here. In large part the FTA has been welcomed by New Zealand stakeholders. However, in an unusual departure from the normal unanimous support for an FTA, there have been some dissenting opinions in New Zealand including from representatives of primary producers who all believe that insufficient market access gains had been secured for their products (see here and here).
More details on the New Zealand and EU FTA will follow in the August print edition of the Daily Cargo News and I will also keep you informed of progress with ratification and implementation of the AUKFTA.
