The UK and Australia have agreed to the general terms of a free trade deal that is expected to become a model for post-Brexit UK trade policy.
Prime Ministers Boris Johnson and Scott Morrison are expected to announce the tentative deal on Tuesday despite concerns expressed by farmers in both countries over elements of the deal.
British farmers fear concessions allowing duty-free, quota-free imports of Australian beef, lamb and sugar would seriously damage the domestic agricultural sector. They are also concerned about welfare standards in Australia, including the use of hormones by some beef producers.
In Australia, meanwhile, farmers have warned that proposals to exempt UK backpackers from having to do farm work when renewing their visas would exacerbate labor shortages, damaging the sector.
Johnson and Morrison negotiated the general terms of the agreement at a dinner in Downing Street on Monday night, allowing for an official announcement, officials told the Financial Times.
“The two prime ministers held a positive meeting in London overnight and resolved the outstanding issues regarding the FTA,” a spokesperson for Dan Tehan, Australia’s trade minister said on Tuesday.
“Their agreement is a victory for jobs, businesses [and] free trade and highlights what two liberal democracies can achieve by working together.
If the trade deal can be signed before the end of the year, it would be the first major bilateral deal fully negotiated by the UK since leaving the EU in January 2020. The agreements announced with Japan and Norway were built on existing agreements that were negotiated while the UK was a member of the EU.
Mark Melatos, associate professor at the University of Sydney, said the Australia deal was important for the UK, but a double edged sword.
“On the one hand, it shows that the UK can do bilateral trade deals after Brexit, albeit with a very close friend, Australia. It is important for the political point of view, ”he said.
“On the other hand, this deal sets a precedent for subsequent, possibly more complicated deals the UK is negotiating. Any concessions granted now to Australia will be a baseline for the start of future negotiations with the US, EU, etc.
Australian Agricultural Company, the country’s largest beef exporter, predicted a increase beef exports tenfold in the UK if the zero-tariff deal is concluded.
But Australian farmers have raised objections to Britain’s demand to remove the requirement for UK backpackers to work at least 88 days on farms to extend working holiday visas.
David Littleproud, Australia’s Minister of Agriculture, said on Tuesday that Canberra would introduce mechanisms to replace the roughly 10,000 UK backpackers who work in Australia’s agriculture sector with alternative labor if the trade deal requires it.
The government has estimated that a free trade agreement with Australia would represent an additional 0.01 to 0.02% of gross domestic product over 15 years, or £ 200-500 million above 2018 levels.
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