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The United Kingdom and Australia have agreed on the general terms of a free trade agreement that is expected to be a model for post-Brexit British trade policy.
Prime Ministers Boris Johnson and Scott Morrison will announce the agreement in principle on Tuesday, despite concerns from farmers in both countries about the elements of the agreement.
British farmers are afraid concessions that would allow Australian imports of meat, beef and sugar without tariffs and without quotas would severely affect the national agricultural sector. They are also concerned about welfare standards in Australia, including the use of hormones by some meat producers.
Meanwhile, in Australia, farmers have warned that proposals to exempt British backpackers from having to do agricultural work when renewing visas will exacerbate labor shortages and affect the sector.
Johnson and Morrison negotiated the general terms of the agreement during a dinner on Downing Street on Monday night, which allowed a formal announcement to continue, officials told the Financial Times.
“The two prime ministers have held a positive meeting in London overnight and have resolved outstanding issues in relation to the FTA,” a spokesman for Australia’s Commerce Minister Dan Tehan said on Tuesday.
“His agreement is a victory for jobs and companies [and] free trade and highlights what two liberal democracies can achieve by working together. “
If the trade agreement can be signed before the end of the year, it would be the first major bilateral agreement fully negotiated by the UK since it left the EU in January 2020. Agreements announced with Japan i Norway they were built from existing agreements that were negotiated while the UK was a member of the EU.
Mark Melatos, an associate professor at the University of Sydney, said the Australia agreement was significant for the UK, but in double-edged sword.
“On the one hand, it shows that the UK can conclude bilateral trade agreements after Brexit, albeit with a very close friend, Australia. This is important from a political perspective,” he said.
“On the other hand, this agreement sets a precedent for later, probably more complicated, negotiations that the UK is negotiating. Any concessions now granted to Australia will form a basis for the start of future negotiations with the US, the EU, etc. “
Australian Agricultural Company, the country’s largest exporter of beef, has forecast one ten times increase in beef exports in the UK if the zero tariff agreement is agreed.
But Australian farmers have raised objections to the British 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 agriculture minister, said on Tuesday that Canberra would introduce mechanisms to replace the approximately 10,000 British backpackers working in Australia’s agricultural sector with alternative labor if required under the trade agreement. .
The government has estimated that a free trade agreement with Australia will be worth an additional 0.01-0.02% of gross domestic product over 15 years, or 200 million pounds (500 million pounds) more than 2018 levels .
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