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AUSTRALIA is likely to have a freshly-minted Free Trade Agreement with the United Kingdom within hours, trade and media sources have suggested this morning.
In the UK for the G7 meetings, Australian Prime Minister Scott Morrison and his UK equivalent, Boris Johnson met in London overnight to thrash out the details of the agreement.
The BBC this morning said the pair had reached an ‘in-principle agreement’ for the deal, which is set to be the first major deal struck by the UK since its departure from the European Union last year.
A formal announcement of the trade deal is expected to be made this evening, Australian time (Tuesday morning in the UK), before legislators in each country attempt to pass the agreement into law.
Australian government and meat and livestock industry contacts declined to comment on the deal’s prospects in recent days, concerned about the sensitivities involved in the negotiation process.
There had been disagreement between the two countries over Australian agricultural exports, and requirements for British backpackers to work in Australia. Sticking points remained on agriculture, where Australia is dissatisfied with the British proposal to take 15 years to phase-out tariffs and quotas on beef, lamb and sugar, and on labour mobility.
An earlier statement from trade minister Dan Tehan said the agreement was a “win for jobs, businesses, free trade and highlights what two liberal democracies can achieve while working together.”
However as recently as yesterday, Mr Tehan told UK media there were ‘still outstanding issues to be resolved.”
Speaking to the Australian Financial Review’s European correspondent Hans Van Leeuwen yesterday, Mr Tehan would not be drawn on those issues specifically, but said that if the Australia-UK deal was not right, the two sides would have to negotiate all over again when Britain begins talks to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which includes 11 Pacific Rim countries.
“If we get this right, then that means the UK will not have to negotiate again with us during their accession to the CPTPP. So, there’s a lot at stake for us to make sure that we get this agreement right,” Mr Tehan told the Financial Review.
“So, we want to make sure that the substance is there, that it’s comprehensive, that it’s ambitious, and if we need to take more time we’ll take more time. My hope is that… we’ll be able to resolve the outstanding issues, but the clock’s ticking and time is running out.”
Prime Minister Scott Morrison has consistently said he wants the “The right deal for Australia, not just any deal.”
Britain is under pressure from its farming sector which has raised concerns that it will be undercut by cheaper Australian product. UK farmers say British goods are more expensive because they are produced to higher environmental and animal welfare standards.
Proponents of the deal — including former Prime Minister Tony Abbott, who now serves as an advisor to the UK Government’s Board of Trade – have highlighted Australia’s historical and cultural connection with the UK to push the deal over the line.
The Australian deal is particularly significant for the UK, because it would be the first major new trade agreement Britain has signed since leaving the EU. Farmers see it as setting a precedent that will then be demanded by New Zealand, the US, Canada and others wishing to establish closer trade tiers.
Finance minister Simon Birmingham, who oversaw initial negotiations as former Federal trade minister, earlier said an agreement would be a big win for farmers and small businesses.
“It will only be done if it’s a good deal for Australia, and crucially in that sense is making sure that our farmers and agriculture sector get the type of export access, along with other small businesses that we expect in a trade agreement to truly open up markets and flow between two nations,” Sen Birmingham said.
“If we can get back to a position where we have substantial elimination of tariffs and quotas for Australian goods, as well as an opening up of services markets, then it does provide access to a significant, high value market in the UK.”
The UK was Australia’s eighth-largest bilateral trading partner in 2018, according to the Department of Foreign Affairs and Trade, with two-way trade valued at $26.9 billion.
The president of the National Farmers Federation, Fiona Simson, has previously said that the volume of Australian red meat to the UK, in the context of the UK’s total red meat imports and Australia’s total exports, was “very, very small.”