The trade deal with Australia is not in itself a game changer, and this is for two reasons. UK trade with Australia is too small – 1.2 per cent of the total – to move the dial, and trade is driven by economic forces, not administrative agreements. The UK’s largest export market is the US and we don’t have a deal with them yet.
But the agreement matters in other ways. It is the first to be reached that is not simply rolling over one that we had already signed up to when we were part of the EU. It is a step along a path that will, over time, help rebalance UK trade away from Europe. This was already happening, as non-EU markets were growing faster than European ones. Deals like this will cause the shift to occur a little faster.
For example, in 2020 France and Italy were the two biggest suppliers of wine to the UK. Australia and New Zealand were a long way behind at numbers three and four. But the gap closed a little, as sales fell for both France and Italy, whereas they rose for Australia and New Zealand. So the shift was already taking place.
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