Boris Johnson and the Australian prime minister, Scott Morrison, will today announce Britain’s first bespoke post-Brexit trade deal.
With most of the deal already agreed, one final key dispute was left to be resolved by the two prime ministers at a dinner in London.
The UK had offered Australia tariff- and quota-free access for beef and lamb exports but demanded a 15-year transition period to give British farmers time to adapt to the increased competition.
However, Australia had rejected this and called for the transition period to be no longer than five years.
One source with knowledge of the talks predicted that the disagreement would not be a “deal breaker” preventing Morrison and Johnson from announcing a deal in principle today. Late last night it was reported by the BBC that a compromise had been reached.
Australian agriculture minister David Littleproud told reporters in Canberra more information will presented in London around 9am this morning.
“Both prime ministers will come together in London to make sure that they can announce it, but the details of that are being finalised now,”said Mr Littleproud.
“It’s important to get this right. As the prime minister said, we don’t need to rush this, but we’ve been able to leverage the strong relationship we have with the UK to get to an in principle agreement, but those details have to be finalised in the coming hours.
“But that’s an exciting thing for not only Australian agriculture, but for our economy.”
One sticking point that is understood to have been resolved earlier was a demand by the UK that Australia remove a rule that enables British citizens on a 12-month working visa in Australia to extend it by another year only if they work 88 days in the agricultural sector.
This is controversial in Australia amid claims that it could lead to a loss of up to 10,000 farm workers a year from the UK. However, the UK claims that it is discriminatory because there are no such stipulations on Australian citizens working in the UK.
Under the terms of the deal agreed so far, Australia would remove tariffs on a range of British products including whisky, which now has a tariff of 5 per cent. There would also be a reduction in tariffs on medicinal and pharmaceutical products as well as cars, machinery and tractors, and greater access to Australian markets for services.
In return Australia wants tariff- and quota-free access to UK markets for its agricultural exports. These are worth $50 billion annually but only $700 million goes to the UK.
The real benefit for the UK would be to pave the way for British membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. This would reduce tariffs on exports to a bloc that includes countries across the Pacific and south and north America with a combined GDP of £8.4 trillion.
Australian trade minister Dan Tehan said: “Both prime ministers have held a positive meeting in London overnight and have resolved outstanding issues in relation to the FTA.
“Their agreement is a win for jobs, businesses, free trade and highlights what two liberal democracies can achieve while working together.”
A spokeswoman for the Department for International Trade declined to comment.