Robert Lighthizer, the US trade representative, has declared it would be "almost impossible" to reach a UK-US deal before the presidential election in November, and with EU trade talks at a stalemate, the DIT relished the idea of more trade with the land Down Under.
However, a UK-Australia deal is likely to involve big compromises for Britain, especially on agriculture, for which Canberra seeks to restore market access lost when Britain joined the EU.
By the DIT's own analysis, liberalising trade for drinks companies, car manufacturers and professional services through a free trade agreement would increase UK GDP over 15 years by a maximum of just 0.02pc.
If there is full tariff liberalisation and a 50pc reduction in non-tariff barriers, DIT even expects regional gross value added (GVA) in Northern Ireland to fall by 0.25pc to 0.5pc.
Meanwhile, any economic benefits from a deal with New Zealand would be negligible "given the size of the two economies" and at worst would shrink the UK economy by 0.01pc over 15 years, reducing GVA in Northern Ireland by between 0.05pc and 0.5pc, DIT said.
Welfare could fall by 0.01pc as benefits to consumers from better prices and real wage improvements would be outweighed by worse returns on capital and land investments.
Despite the underwhelming figures, a deal with Australia could reduce the economic pressure on both countries from China, Australia's biggest trading partner and the UK's sixth-largest.
Britain has also applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) that links Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Membership of such an agreement could give the Government an alternative path to a US deal. Although America withdrew from joining the pact after Donald Trump was elected President four years ago, his 2020 rival Joe Biden backed it and has signalled he would consider membership if he enters the White House.
Trade experts say Biden's multilateralism would attract him more to the Partnership than a bilateral deal with the UK, just as Barack Obama threatened that Brexit would put Britain at the "back of the queue" for trade deals – behind the EU.
When complete, the bloc will represent 13.5pc of global GDP, rising to 16pc if Britain joined, according to the Canadian government. Liz Truss, the Trade Secretary, said she hopes this will diversify UK supply chains, the fragility of which the pandemic has revealed.
But the irony of Britain leaving one bloc for another of similar size, 450 times further away, will be lost on few.
- Telegraph Media Group
