Coincidentally, the December 31 deadline for the Brexit trade agreement with the European Union Boris Johnson It has again warned the UK to stand up for the possibility of an “Australia-style” deal. It seems like the two countries that depend on international trade want to land fairly, but what does this really mean?

What did Boris Johnson say?

The Prime Minister of the United Kingdom has said that the “Australia option” is “a strong possibility” where Britain will end.

“January 1 is the time for the public and businesses to be prepared, because trust me there is going to be a change in both directions,” Johnson said Thursday night, UK time.

“It’s a change from the Canada style agreement or the Australia style agreement, but we need to make the right products now for that Australian solution.”

In October, Johnson said that due to the EU’s stubborn infiltration, he had to decide that the “Canada-style” trade deal he was looking for would not be successful without a “fundamental” change in the negotiating situation in Brussels.

What is an ‘Australia Style’ Trade Agreement?

Australia operates primarily with the European Union under the World Trade Organization (WTO) rules – which apply to a wide range of tariffs, quotas and customs checks on many commodities – even after two years. Attempts to negotiate a more favorable free trade agreement. There are some unique agreements between Australia and the EU, such as concessions on alcohol imports, which do not apply under the UK-EU agreement without negotiation.

Downing Street began using the term “Australia-style” earlier this year Proxy.

Johnson said on Twitter that Carl Bildt, co-chair of the European Foreign Council, “thinks this is very good.”

“Someone has to tell him that Australia is actually negotiating a trade agreement with the EU.”

How is Australia’s trade relationship with Europe?

Former Australian Prime Minister on Thursday Malcolm Turnbull He described it as unsatisfactory when the BBC’s question time appeared, citing huge restrictions, especially on agricultural exports.

“Be careful what you want,” Turnbull said.

“Australia’s relationship with the EU is not from a trade point of view … Britain openly wants that.”

The EU is Australia’s third largest trading partner, the third largest service export market and the third largest source of foreign investment, but the FTA believes the Australian government can gain more value from its European trade.

What’s next?

The “Canada-style” deal, as Johnson points out, seems to have been judged by his most recent comments, which included reduced tariffs on imports and quotas.

He now seems to have taken the lead in selling the benefits of the “Australia-style” deal (or not having a deal, effectively).

“This is a strong possibility, a strong possibility, that we will find a solution similar to Australia’s relationship with the EU, rather than Canada’s relationship with the EU,” he said on Thursday.

“That doesn’t mean it’s a bad thing. There are a lot of ways, like I said, to change it in favor of both sides in the conversation, and there are plenty of opportunities for the UK.”

The significant difference between Australia and the UK in relation to current trade with the EU is the quantity and type of goods traded.

Australia trades 11% of its products to Europe, most of which are raw materials, while the UK trades more than half of its products, including a wide range of products.

The impact of the relatively unfavorable terms that exist between trade partners under the rules of the World Trade Organization will therefore have a much greater impact on the UK than on Australia.