Britain and Australia have agreed a trade deal after talks between their prime ministers ironed out outstanding issues, Australia's Minister for Trade Dan Tehan said today.
Britain had made securing a trade deal with Australia a priority for its post-Brexit strategy as it seeks to build stronger commercial and diplomatic links in the Indo-Pacific region.
But negotiations have dragged on for months.
Australia's Prime Minister Scott Morrison and his British counterpart Boris Johnson overcame sticking points during a bilateral talks after the Group of Seven meeting in Britain over the weekend, which Morrison had attended as a guest.
"Both prime ministers have held a positive meeting in London overnight and have resolved outstanding issues in relation to the [Free Trade Agreement]," Tehan said in a statement.
A formal announcement would be made later today, Tehan said.
The deal will be keenly scrutinised by British farmers, who fear they could be forced out of business if the deal eliminates tariffs on lamb and beef imports from Australia.
Though details have still to emerge, official estimates say the agreement could add £500m to British economic output over the long term.
For Australia, however, analysts questioned the importance for an economy already focused on Asia.
"This free trade agreement is more about symbolism than immediately tangible material benefits," said Ben Wellings, senior lecturer in politics and international relations at Monash University.
Possible consequences for Irish exporters
Carol Lynch, Customs & International Trade Services Partner at BDO, said it was a very significant deal for the UK as it was the first independent, stand-alone free trade agreement that Britain had negotiated post-Brexit.
"The deals to date have been rollover from EU trade agreements that the UK would have had access to before Brexit," she explained.
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However, Ms Lynch warned that the agreement could have potential negative consequences for Irish agri-food exporters in particular.
"The biggest concern for farmers is the provision of zero-quota, zero-tariff access for [Australian] beef into the UK. 50% of our beef is exported to the UK."
Under the EU-UK trade agreement, we continue to have tariff-free access to the UK market.
However, with the zero-tariffs, zero-quotas element of this latest agreement, Australian beef will have the same access to the UK market as Irish farmers have.
"They've made it very clear that they're going after a section of that market and that they they're looking to displace Irish exporters," Carol Lynch told Morning Ireland.
She pointed out that an even bigger concern was that this could become the standard for future trade agreements that the UK is seeking to conclude, particularly an impending deal with the US, described as the 'holy grail of agreements' for the UK.
"The important point for Irish farmers is to be aware that these agreements are happening and the type of agreements that are going to take place... and to be looking outside of the UK market and develop the European market where we have tariff-free access and with the single market that is completely protected from outside competition," she concluded.
IFA expresses concern over proposed UK-Australia trade deal
IFA President Tim Cullinan said the proposed trade deal between the UK and Australia sets a perilous precedent and is very concerning for Irish beef farmers.
Tim Cullinan said that apart from the extra checks that will apply following the trade agreement reached last December, the threat to the country's markets is the biggest fallout for Irish farmers from the vote nearly five years ago.
"It's precisely the dangerous scenario that we have signalled following the Brexit vote in June, 2016. Trade deals between the UK and 3rd countries have the potential to undermine what is a very important market for our beef exports,' he said.
The Presidents of the IFA and NFU will hold a bilateral meeting later this week to discuss the implications of the deal.
"We have worked closely with NFU since the Brexit vote nearly five years ago. Farmers here and in the UK are committed to the highest standards and we are opposed to any trade deal that gives an opening to sub-standard food imports," he said.
Total beef exports last year were €1.9 billion, with nearly half of exports going to the UK market.
"It's our most valuable market, in terms of volume and price. Any loss of shelf space would be very damaging for our livestock farmers, who are in a low-income sector," he said.
Additional reporting by Brian Finn