Wednesday 17 June 2020
Contingencies Fund Advance
The Cabinet Office has sought a repayable cash advance from the Contingencies Fund of £270,100,000.
The requirement has arisen due to increased costs relating to urgent expenditure, including that relating to the covid-19 response.
Parliamentary approval for additional resources of £107,100,000 and £163,000,000 of capital has been sought in a main estimate for the Cabinet Office. Pending that approval, urgent expenditure estimated at £270,100,000 will be met by repayable cash advances from the Contingencies Fund.
Trade Negotiations with Australia and New Zealand
Today, the Government publish their approach to trade negotiations with Australia and New Zealand, as well as providing an update on their approach to accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
New Zealand and Australia rank among our closest friends. We share a language, head of state and a system of common law, and we have a proud shared history. We also have a common set of values. Like the UK, both nations have always stood up for what is right and maintained a fierce belief in the merits of trade openness, the rule of law, international co-operation, and democratic Government.
But what we have never had with either is a free trade agreement. That can change now the UK has left the EU. Our future success as a country depends partly on using our new-found status as an independent trading nation to strengthen ties with old allies beyond Europe. Ambitious, wide-ranging free trade agreements with old friends like Australia and New Zealand are a powerful way for us to do that and make good on the promise of Brexit.
From a purely economic perspective, deals with both countries can help deliver the things that our people care about—better jobs, higher wages, greater choice, and lower prices.
UK businesses traded £21 billion worth of goods and services with Australia and New Zealand combined in 2019. Trade agreements with Australia and New Zealand could increase UK exports to Australia and New Zealand by around £1 billion—with beverages firms, the automotive industry and professional services among those expected to benefit. Opportunities for these agreements include additional access for UK services and investment, removing tariffs and other barriers to trade in goods and the chance to shape the future of digital trade.
An ambitious UK-Australia trade agreement could increase UK GDP by up to £500 million and UK workers’ wages by up to £400 million. It can enable small and medium-sized enterprises (SMEs) to export more goods and services to Australia, building on the 13,400 UK SMEs that already exported goods there in 2018.
A cutting-edge agreement with New Zealand could increase UK workers’ wages by up to £200 million. New Zealand and the UK also share a particular ambition to work together to promote clean growth through trade—a key contribution to a low-carbon economic recovery.
But perhaps more importantly than the pure economics, both these countries are vital to the UK’s future place in the world and our future sovereign capability.
The pandemic has given oxygen to the politics of protectionism across the globe, and to those who advocate closed, statist economies. Trade agreements with Australia and New Zealand are important in helping our country and the world move beyond coronavirus.
Strengthening ties between nations who believe in free trade is a powerful way to defend the principles of open markets and international co-operation, and in doing show that free trade is still the best way forward for the world after coronavirus.
Strategically, our aim is to place the UK at the centre of a network of modern free trade agreements, turning our country into a global hub for businesses and investors who want to trade in dynamic areas of the world—especially in the Asia-Pacific.
Pivoting towards the Asia-Pacific will help diversify our trade, make our supply chains more resilient and make the UK less vulnerable to political and economic shocks in certain parts of the world. This economic security is important at a time of increased turbulence and uncertainty in the world.
It will also help us forge a leadership position among a network of countries committed to free trade—and strengthen the club of like-minded democracies who share our commitment to advance trade liberalisation, fight protectionism and defend international rules.
Australia and New Zealand are both big players in the Asia-Pacific and share our commitment to free trade. They are also prominent members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership—a club of eleven countries representing 13% of global GDP.
The UK had more than £110 billion-worth of trade in 2019 with the 11 countries in the group and we are determined to increase our trade through membership. CPTPP will help us diversify our trade and join a strong, modern trade agreement between countries committed to free and fair trade in the Asia-Pacific region and beyond. Both Australia and New Zealand support our membership, and free trade agreements with both countries would be an important step towards our eventual accession.
Today, the Department for International Trade is publishing three documents:
UK-Australia Free Trade Agreement: the UK’s strategic approach
UK-New Zealand Free Trade Agreement: the UK’s strategic approach
An update on the UK’s position on accession to the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP).
We will be placing copies in the Libraries of both Houses. For Australia and New Zealand, these documents include:
The Government’s negotiating objectives for each trade agreement.
A scoping assessment providing a preliminary assessment of the potential long-term economic impacts for each agreement.
The Government’s response to the public consultations on each agreement, setting out how these have informed our policy development.
As with our whole trade agreement programme, these agreements need to work for the UK. We have been clear that future agreements with Australia and New Zealand must work for UK consumers, producers and companies. We remain committed to upholding our high environmental, labour, food safety and animal welfare standards in our trade agreements with these countries. The Government have been clear that when we are negotiating trade agreements, we will protect the national health service. Our objectives reinforce this.
We are engaging with the devolved Administrations, Crown dependencies and overseas territories to ensure that we develop agreements that works for the whole of the UK. The Government are committed to transparency and we will continue to ensure that parliamentarians, businesses, and the range of civil society stakeholders have access to information on our trade negotiations.
Negotiations with Australia and New Zealand will be carried out by video conference, ensuring that talks can progress during the coronavirus pandemic. We will continue to conduct talks remotely until it is safe to conduct talks in person.