UK FTA to prise open Australia’s borders

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Australia and the UK are tipped to start formal discussions on a free trade agreement (FTA) once the UK leaves the European Union. It is rumoured that a trade deal could include visa-free travel between the two countries:

Australian workers could enjoy visa-free travel to the UK under a post-Brexit free trade agreement, with both Canberra and London eager to sign a deal before Christmas 2020…

Mr Johnson has long advocated for trans-Tasman-style free movement between Britain and Australia post-Brexit, calling for “creative thinking” among Anglosphere countries.

“These are nations that are very similar in many ways – we share very, very similar interests and a uniquely shared set of values,” Mr Johnson said during the Conservative Party’s leadership race this year.

He first promoted the idea of an Australia-Britain common travel area as mayor of London, but the proposal has been met with hesitation by some in Australia – amid concerns about the number of British citizens who could take it up.

British High Commissioner to Australia, Vicki Treadell, said business links and immigration controls would be part of any deal.

“We want easy business to be done between our two countries,” she said on Monday. “Part of that is actually how the movement of people takes place between our two countries.

My firm view is that immigration should never be included in FTAs to begin with. Immigration is covered in Australia’s ‘Migration Programme’, and there is little sense in negotiating away control of our sovereign borders to another nation – and risking diluting Australian wages and working conditions – for slightly improved market access.

FTAs should be for trade and nothing else.

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That said, I am less concerned about a labour movement agreement with the UK, given UK are the highest paid migrant group:

Therefore, they are more likely to be used by employers to fill genuine skills shortages, rather than to undercut Australian workers.

Inflows of UK migrants is also likely to be matched by Australians moving to the UK, thus mitigating any population pressures.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.