UK's govt divided on Australia trade deal

The British government is reportedly split over plans for a post-Brexit Australia trade deal, with Cabinet members concerned about a backlash from farmers if the United Kingdom grants tariff-free access to agricultural produce.

The department of agriculture and the department of international trade are in disagreement over the terms of a possible deal, according to a report in the Financial Times.

The FT said Liz Truss, the international trade secretary, and chief trade negotiator David Frost favor a no-tariff deal that would lower costs for consumers, but, the paper says, George Eustice, the environment secretary, and Michael Gove, the Cabinet Office minister, warn of potential political fallout because the move would undercut British farmers and wealthy landowners.

An inside source told the FT: "There is an absolutely ferocious row going on in Whitehall over the Australia deal with real pressure to get it resolved by the end of this week. Gove and Eustice are on one side, Truss and Frost on the other."

The Daily Mail reported on Wednesday that Prime Minister Boris Johnson is siding with Truss and Frost on what would be Britain's first major post-Brexit trade deal that is not an adaptation of an existing one.

The deal proposed by Truss would give Australian farmers the same access to the UK as exporters from the European Union, reported The Times. It said that under any deal, zero tariffs would be "staggered over the next decade" allowing British farmers "to make improvements in productivity".

The Times said Gove and Eustice have warned that the deal would set "a dangerous precedent for future trade agreements" that could lead to "UK farmers facing cheap imports from countries with lower standards".

Australia's prime minister, Scott Morrison, has been invited to attend next month's G7 summit, in Cornwall, England, as a guest, and it is understood the government hopes to secure a deal in advance of this meeting, the FT noted.

A government source was quoted by The Times as saying: "There is worry across Whitehall about the overall principle of liberalization and the precedent it will set. There is a feeling that what we agree with Australia, is likely to become a template for our negotiations with other countries and in particular America."

The Times said supporters of Truss believe failure to open up markets could also "jeopardize the UK's chance of joining the Trans-Pacific Partnership free-trade agreement, of which Australia and New Zealand are key members".

Speaking to Sky News on Tuesday, Eustice argued that there was a "balance to be struck" in any trade deal, between opening up and protecting domestic industries. The Daily Mail noted that this is a view shared by the National Farmers' Union.

The Cabinet split is characterized by a Whitehall source, quoted in The Times, who said: "This is a fundamental argument about the nature of global Britain. Do we want to seize the benefits of Brexit and strike advanced trade deals, or pull up the drawbridge?"