After two weeks of intensive talks, Australia and the US have agreed a multi-billion dollar free trade pact.

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The talks were held back by US reluctance to open its markets to Australian beef and sugar, and overran the Friday deadline, but were finally resolved during a phone call between Australian prime minister John Howard and US president George W. Bush on Saturday.


Sugar has been left out of the deal, leaving Howard open to criticism that the US gained the better part of the bargain. Tariffs on all US agricultural exports to Australia, worth nearly $400m a year, are to be dropped immediately.


US farmers campaigned hard against increases in imports of Australian sugar, beef and dairy produce. President Bush is keen to avoid upsetting voters in farm states ahead of November’s presidential poll.


US beef farmers are to enjoy an 18-year breathing space during which cuts in customs duty on Australian beef will be phased in. The initial changes cover imports equal to 0.17% of US beef production, the USTR office said.

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Duty free shipments of Australian dairy produce will initially go up by 0.17% of the value of US output and no tariffs will be cut, according to the USTR.


Australian National Farmers’ Federation president Peter Corish said that, apart from an improvement in dairy and horticultural access, farmers had not gained much from the deal.


The Australian Seafood Industry Council responded more positively, saying that the industry stands to gain tens of millions of dollars from the free trade deal.