Thread by @DavidHenigUK

Morning. In broad terms it seems the government is announcing today that it hasn't quite finalised a trade deal with Australia.

This is regrettably normal in global trade policy terms, where the same deal can be announced several times.

Indeed one of the reasons why so many have lost faith in trade deals is the repeated announcement of completed deals of very limited benefit. And so the UK government has chosen to follow that rather dismal path.

We're not expecting too many details today about what has been agreed beyond that we know already such as tariff elimination, though from the Australian press it seems generous terms on people movement might be new.

As we might now realise from the rushed agreements with the EU, the details of trade deals are rather important. So if we don't see these today regarding the Australia deal there isn't a lot we can honestly say about whether this is a good or bad deal.

But again in broad terms, expect zero overall economic impact (even the pessimistic version of the official impact assessment makes assumptions never met in a trade deal) but some sectoral impact eg farming. And big headlines.

Remember most trade takes place in regional value chains and the UK and Australia being in different regions are typically in different corporate worlds. There will be some new opportunities from so e removal of barriers - but most likely not many.

Oh and for the slow class that keeps talking of current government policy being free trade - global tariffs are fairly insignificant for countries like Australia and UK, so their removal has similarly insignificant effects on eg prices. You may get slightly wider choice.

Huge difference between a single market, as Australia has with New Zealand or we used to have with the EU, and a tariff reducing agreement. The first is close to free trade, the second is still a world of trade barriers.

Also worth saying that free trade always comes with conditions, the bit you never hear from its self proclaimed cheerleaders. Those conditions always include perceived fairness balanced against outright protectionism. That's the small print we probably won't see today.

Watching the UK-Australia discussion evolve this morning, important we add that the estimated 0.02% UK GDP gain is based on heroic assumptions not even close to being achieved in any previous deal. 0.00% is a more realistic estimate.

Second important note - for Australia this is about at least equalising tariff free access with New Zealand to the UK - at the lowest possible cost. Aus tariff free WTO quotas on lamb and beef were very low. Job therefore done.

Ah yes, an Australia trade deal as a gateway to half a billion people in the CPTPP. All but 30 million of whom we'll already have bilateral deals with. Oh, and they're in Malaysia and Brunei, who haven't in fact ratified CPTPP and may never do so.

Look out for a CPTPP impact assessment coming soon - I would be surprised if the forecast GDP gain is more than 0.1%.

So far the details of the UK-Australia trade deal announced today have been nothing we didn't already know. Hence the relatively low key announcement. There had to be an announcement as the Australian PM was here. But it doesn't feel like negotiations are in fact complete.

Also watch out for the opportunity cost of new trade deals. Australia got their top asks from the UK - agriculture. The UK didn't have a top ask of Australia, hence why none is being flagged. If we find one in the future, too late, we already gave them what they wanted.

Incidentally the UK-Australia deal also isn't the first we have negotiated from scratch since Brexit. The text of our deal with EFTA countries was also created from scratch as we couldn't replicate the previous situation. That was completed last week.

Those with long memories may also recall that the UK government claimed last year that the Japan deal was "the UK’s first major trade deal as an independent trading nation" (it wasn't, it was largely based on the EU text).

Anyway, back to the new first UK trade deal...

So, to summarise, this Australia deal is the second time the UK government has claimed a first post-Brexit trade deal, neither was true as that was EFTA, the economic value is insignificant, and the deal probably isn't quite finished anyway. Apart from that...