Liz Truss to hold showdown talks with Australia over 'glacially slow' trade negotiations

Liz Truss has thrown down the gauntlet to her Australian counterpart over “glacially slow” progress in trade deal talks, as her allies urged Canberra to “show us the colour of their money”.

The International Trade Secretary is preparing for showdown negotiations with Dan Tehan, Australia’s trade minister, after he accepted her invitation to meet face-to-face in London this week.

Sources in her department told The Telegraph that Australia needs to show “some serious movement on their side” to unblock negotiations on a free trade agreement, which are said to have stalled since Mr Tehan took up the role in December.

By contrast the first four rounds of talks, led by his predecessor Simon Birmingham and Ms Truss, made “really rapid progress”, it is claimed.

Canberra has been accused of being “slow to move on key UK asks”, including on sensitive areas in services, investment and business visas – particularly in legal services and management consultancy.

These sectors are viewed as central to the British economy’s recovery from the pandemic.

The UK also wants to see Australian tariffs slashed on Scotch whisky and cars, both levied at 5 per cent at present. By turns Canberra is pushing for bigger wins on agriculture, particularly lower tariffs on meat exported to Britain.

A bilateral trade deal between the two nations is expected to boost UK exports to Australia by around £900 million.

Mr Tehan arrives in the UK on Wednesday evening and the two-day dialogue begins on Thursday.

He is expected to launch a media and PR blitz while in London.

The source close to Ms Truss quipped: “She plans to sit him down in the Locarno Room [in the Foreign Office] in an uncomfortable chair, so he has to deal with her directly for nine hours.”

The ally said that Mr Tehan and Ms Truss have struck up a good rapport, but added: “He is inexperienced compared to Liz. He needs to show that he can play at this level.

“Australia need to show us the colour of their money. They’re great friends of ours and talk a good game about free trade and wanting a deal, but they need to match those words with action.”

It is thought that there is pressure on Mr Tehan to make a substantial breakthrough before flying back to Australia on Friday night, given the rare exception made for him to leave the country amid its strict closure of the borders due to Covid.

British officials believe it is highly unlikely, although not impossible, that a trade deal could be clinched between the pair before his departure, but if the talks unblock the remaining issues, an agreement could be achievable within six to eight weeks.

Ms Truss believes that in-person talks at the political level hold the key to finalising the deal.

She successfully employed a similar tactic with Japan last summer, using “occasionally fiery face-to-face negotiations” with her Japanese counterpart to make headway over the most contentious issues.

Annual UK trade with Australia is worth over £18 billion, with services accounting for 60 per cent. There is a wider strategic importance to a bilateral trade deal for Britain, because the Government wants to join the Trans-Pacific Partnership (CPTPP) – the £9 trillion free trade area in which Australia is a key player – later this year.

Striking a UK-Australia deal would pave the way towards eventual British membership of the trading bloc, which is viewed by Whitehall as a crucial counterweight to China and its trade practices that are accused of distorting markets.