The broad terms of a trade deal between the UK and Australia have been agreed, the BBC understands, with a formal announcement expected on Tuesday.
UK Prime Minister Boris Johnson and Australian Prime Minister Scott Morrison agreed the deal over dinner at 10 Downing Street.
The UK government has signed a long list of trade deals over the past year, but they have been rollovers of those the UK already had as part of the EU.
This is the first trade deal to be negotiated from scratch since the UK left the EU, and is seen as an important step towards the UK joining the Progressive Agreement for Trans-Pacific Partnership (CPTPP) free-trade agreement.
The new trade deal will give UK and Australian food producers and other industries easier access to each other’s markets – as signified by the meal served on Monday evening: Welsh lamb and Scottish smoked salmon, washed down with Australian wine.
However, there have been concerns in the British farming community about the UK compromising on its food standards as farmers in Australia are allowed to use hormone growth promoters, pesticides, and feed additives that are banned in the UK.
The National Farmers Union also worries that Australian farmers are able to produce beef at a lower cost and could undercut British farmers.
The Department for International Trade has previously said any deal with Australia would include protections for the agriculture industry and not compromise the UK’s high standards.
Prior to entering the European Common Market in 1973, the UK was Australia’s most lucrative trading market. Australian farmers have essentially been locked out of the UK market for almost 50 years, so the agreement opens up a much-coveted area for the Australian agricultural industry.
This deal sets the tone as the world watches closely to see what a post-Brexit British economy looks like in action.
The news is even more significant now as Aussie farmers are forced to diversify due to increased tensions between Canberra and Beijing.
In the past year, China has slapped tariffs and restrictions on everything from Australian beef, barley and wine, to rock lobster and coal.
The ABC reported that Agriculture Minister David Littleproud said the UK and Australian governments were still “nutting out the details” of the deal.
There had been disagreement over details such as requirements for British backpackers to work in Australia, a rite of passage for many pommie youngsters.
Littleproud said a deal had been struck to make sure any drop in UK backpacker numbers, usually about 10,000 every year, would be replaced through other “mechanisms”.
A 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”.
The Australian prime minister said the UK leaving the Common Market in the 1970s was a “devastating blow” to Australian producers, but Britain’s decision to leave the European Union has provided an opportunity to reset the trade relationship.
“The Brexit that has occurred is an opportunity for us to pick up where we left off all those many years ago, and to once again realise the scale of the trading relationship that we once had,” he told the Australia-UK Chamber of Commerce on Monday.
In a thinly veiled reference to China’s increasingly assertive posture in the Indo-Pacific, Morrison stressed shared intelligence and co-operation with the UK as vital to the region’s stability.
A formal announcement will be made after the prime ministers meet for breakfast on Tuesday morning, London time, before Morrison meets Queen Elizabeth at Windsor Castle.