THE UK has reached a preliminary agreement on trade with Australia, sparking fears over the impact on Scottish farmers and demand for beef and lamb.

However the deal, agreed in principal last night when the Prime Minsiter met with his Australian counterpart Scott Morrison, will be welcomed by the whisky sector as five per cent tariffs on imports will be removed. 

Announcing the deal today, Boris Johnson hailed it as a "new dawn" for the two country's trading relationship and said it represented "global Britain at its best". 

He said: "Today marks a new dawn in the UK’s relationship with Australia, underpinned by our shared history and common values.

“Our new free-trade agreement opens fantastic opportunities for British businesses and consumers, as well as young people wanting the chance to work and live on the other side of the world.

“This is global Britain at its best – looking outwards and striking deals that deepen our alliances and help ensure every part of the country builds back better from the pandemic."

READ MORE: Scottish food and drink sector concerned over 'rushed' UK-Australia trade deal

Along with the removal of tariffs on Scotch whisky, biscuits and ceramics from the UK to Australia, products from there including Jacob's Creek and Hardy's wines, swimwear and confectionery will be imported to the UK tariff-free, which the government says will provide more choice for consumers and claims households will save up to £34m a year.

The UK government also says that farmers will be protected by a cap on tariff-free imports on agricultural products for 15 years.

The full Agreement in Principal is to be published in the coming days, however politicians have already began raising concerns about the impact of the plans on farming.

The Scottish Government's trade minister Ivan McKee also said a briefing he was due to have on the deal had been postponed as there was not enough detail yet.

The Liberal Democrats trade spokeswoman Sarah Olney MP said: "The Conservatives have serious questions to answer about how this agreement will prevent cheaper and lower quality food products flooding the UK market, threatening our agriculture and food safety."

She added: "For a deal with such few economic benefits to the UK, the Government should have at least ensured that UK standards on animal welfare are maintained, protecting farmers and consumers, but it seems that they have been sold down the river.

“Ministers must urgently explain what steps they will take to limit the damage from this deal. And they must finally start paying attention to the thousands of small businesses that are struggling to trade with our European neighbours.”

SNP MP Angus MacNeil, who chairs the international trade committee, said this morning that the agreement could bring both benefits and disadvantages.

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He said: "The UK and Australian negotiating teams have worked hard to reach this agreement in principle and it’s encouraging to see the Aussie appetite for our products. While the devil will be in the detail, and the prospect of increased trade with Australia is welcome, it cannot be on their terms or to an Australian tune."

He continued: "In its rush to reach an initial agreement, I fear the Government could sign up to something which brings significant harms as well as benefits.

"The views of the entire farming sector especially are no secret now, including those in the devolved nations, who are particularly concerned about being undercut by cheaper meat and dairy produce from ‘down under’.

“My Committee will hold the Government to account for its promise that UK farmers won’t be undercut by imports produced to lower standards. No one wants an agricultural industry left stuck in the mud.

“The trade negotiation team must come to a public hearing of the Committee; this is too important for a ‘pig in a poke’ deal - we don't want the UK to agree to something that hasn't been scrutinised.

“We look forward to seeing further details about what has been agreed in principle and the full text of the agreement with enough time to allow it to be subjected to rigorous scrutiny, during and at the end of the process.”

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However Karen Betts, chairwoman of the Scotch Whisky Association, praised the agreement but said more details would be needed to understand the full benefits.

She said: "It’s very good to see the removal of the 5% tariff on Scotch Whisky in the Agreement in Principle between the UK and Australia. 

"This will help Scotch Whisky distillers continue to expand exports to Australia, which have almost doubled over the last decade, making Australia our eight largest market by value.

"It’s also important to us that trade with Australia is now tariff-free for Scotch Whisky – our preference is always for tariff-free trade, which enables Scotch Whisky to compete on a level playing field and on the strength of our reputation for quality.

“We await further details of the Agreement in Principle. A framework for addressing regulatory barriers to trade with Australia, to ensure greater legal protection and tax fairness for Scotch Whisky, is also important to us, and – if delivered in this agreement – will be a real boost for the industry."

Scottish secretary Alister Jack said the deal was "welcome news" for Scotland.

He said: "Australia is the world’s eighth largest market for Scotch whisky exports, worth £113m last year. The removal of tariffs presents a fantastic opportunity for our iconic distilleries.   

“Scotland’s financial services, manufacturing and pharmaceutical sectors will also receive a boost.

 “Measures to protect the UK’s agriculture industry and maintain high standards will also help Scottish farmers make the most of international opportunities opened up by this deal."