There were four companies that, in their responses, referred to or received commercial funds. One said that any free trade agreement between the UK and Australia should reflect WTO trade defence legislation, while the other stressed the importance of remedial measures in a free trade agreement, without explaining why. Two companies expressed concern about the cost of requesting remedial action, indicating that costs can be prohibitive for SMEs. The government remains committed to a deep and specific trade partnership with the EU, but with our new independent trade policy we can also benefit from changes in the global economy: according to the IMF, 90% of global economic growth is expected to come from outside the EU over the next five years; [Footnote 180] and 54% of UK exports of goods and services are now traded outside the EU[footnote 181], up from only 46% in 2006. In addition, an ambitious and comprehensive trade agreement is expected to generate revenue gains in both countries, which could be used to pay for measures to mitigate negative environmental effects while leaving an economic surplus. However, the policy of distributing the redistribution of benefits for mitigating measures is not within the scope of this free trade agreement. Given the above restrictions, the results should not be interpreted as a comprehensive assessment of the environmental impact of the agreement. The main advantage of synthetic controls in solving this endotricity problem is that the effect of unsupervised disturbances varies over time, unlike similar econometric methods such as difference patterns or concurring estimates, which can only be circumvented with unsupervised time variables of countries (Abadie et al. 2010). This is an essential feature of trade agreements that examine the effects over time. Assessing the impact on trade of synthetic controls would therefore be a new way of addressing the problem of endogenous distortion in the specialized literature. Table 14 shows that, in sensitivity A, the impact on UK GDP is limited to 0.00%. In terms of sensitivity B, the impact on GDP is estimated at 0.02%.
In 2018, more than 60% of UK exports to Australia were in the services sector. Total UK services trade with Australia, imports and exports, has increased by more than 30% over the past decade, from $6.4 billion in 2008 to $10.0 billion in 2018. [Note 60] A number of comments focused on the potential benefits of reducing or eliminating tariffs between the United Kingdom and Australia. It was felt that this could further improve trade between the two countries and that it should be a key priority for a future free trade agreement until Australia benefits more than the United Kingdom. Stakeholders stressed the importance of protecting certain sectors by maintaining existing tariffs. In particular, stakeholders drew attention to the fact that a reduction in tariffs (and a broader free trade agreement) could have implications for certain sectors, such as agriculture. Some stakeholders recommended maintaining or reducing tariffs in these sectors over time in order to deal with negative effects on UK industry. The government is committed to giving Parliament the opportunity to inform and review new trade agreements as we move forward in the development of our future trade policy.