What is an Australian-style deal with the EU?

Australia has limited side agreements with the EU on specific issues. It does not have a full trade deal. So “the Australian option” is essentially marketing speak for No Deal.

Detailed answer: During the current trade negotiations between the United Kingdom and European Union, references to Australia keep being made. Key figures on the UK side keep saying “an Australian-style deal” or “the Australian option”.

But what exactly is an Australian-style deal with the EU? Well, given Australia doesn’t have a full trade deal with the EU, it basically means No Deal.

This isn’t quite the full picture, however. Australia does have a few side agreements with the European Union with limited scope. These include things like sharing passenger name records on flights and classified information. The UK in a Changing Europe website has a useful summary.

So when UK government ministers talk of an Australian-style deal with the EU, it isn’t quite true. Failing to reach a trade deal with the European Union would see the UK trading with the EU on strict World Trade Organisation terms. This can lead to heavy tariffs on imports and exports, plus incompatibilities when it comes to recognising standards and regulations.

Trade on WTO terms

The vast majority of Australia’s trade with the EU is done on WTO terms, but it has those few limited side agreements which generally don’t have much impact on trade.

More importantly, the vast majority of Australia’s trade isn’t with the EU, so this doesn’t matter all that much. 43% of the UK’s trade is with the EU.

If no deal is struck before the end of the transition period on December 31, the UK will be using the “Australian option” to trade with the EU. That’s because it won’t have the small side agreements. It could be more accurately termed a Pakistan-style trade agreement or the Somalia option.

koala in Australia — An Australian-style koala. Which is the sort of cute and fluffy thing anyone referring to an “Australian-style” trade deal with the EU wants you to think about. Photo by David Whitley/ Australia Travel Questions

So why is it being called an Australia-style deal? Well, it’s pure, cynical marketing. People in the UK generally rather like Australia. Many have friends and relatives in Sydney or Perth, and it is seen as the fun, sunny country of Neighbours, koalas and surfers. “Australia-style deal” just sounds quite nice.

It’s the same principle that’s used with immigration. “Australian-style points-based system” is often trotted out to describe what a particular party would put in place. This is despite the UK having a points-based immigration system since 2007.