LONDON (BLOOMBERG) - The UK is set to announce the broad terms of a free-trade deal with Australia on Tuesday (June 15), its latest post-Brexit accord as Prime Minister Boris Johnson seeks to expand commerce beyond the European Union.
The pact was finalised at a dinner between Johnson and Australian Prime Minister Scott Morrison on Monday night, according to a person familiar with the negotiations, who asked not to be identified.
The agreement is expected to cut tariffs on products like Scotch whisky, clothing and cars. It is also due to reduce levies on agricultural products, a point of controversy that had sparked a backlash from Britain’s farming sector.
Completing the Australia deal - which is expected to boost the size of the UK economy by 0.02 per cent over 15 years - is a symbolic boost to Johnson's post-Brexit agenda, being the first agreement with a major ally that goes beyond rolling over an existing EU trade relationship.
Australia is the UK's 20th-largest trading partner globally, and trade with Australia made up 1.2 per cent of Britain's total in 2020.
The UK-Australia negotiations had been mired in controversy in recent weeks over concerns from British farmers that they would be undercut by cheap meat imports.
The British government had hinted that tariff reductions would be phased in to protect farmers.
Progress with Australia is a welcome relief for Johnson amid ongoing tensions with the EU over their post-Brexit settlement, particularly concerning Northern Ireland.
The UK has opted not to introduce some checks on goods crossing into Northern Ireland, saying the EU's "draconian" approach to enforcing the rules is hurting local communities.
The EU, which is Britain's largest trading partner, says the UK is failing to implement the terms of the Brexit deal Johnson signed less than two years ago.
Britain's next trade targets are deals with New Zealand and the US, though an accord with the latter in the short-term looks unlikely given President Joe Biden's desire to focus on domestic issues.
The British government also sees the Australia accord as a stepping stone to joining the CPTPP, an 11-country pact that includes the likes of Singapore, Malaysia and Japan.