The UK is to begin preliminary talks with Australia about the outline of a future free trade deal between them.
Officials will meet twice a year to discuss the parameters of what both sides said they hoped would be an “ambitious and comprehensive” deal.
Australia has been earmarked by the UK as its first post-Brexit trade partner.
International Trade Secretary Liam Fox and his counterpart Steven Ciobo said they shared a “strong political commitment” to trade liberalisation.
‘Time is right’
No agreement can be reached until the UK leaves the EU which is not expected to happen until 2019 at the earliest depending on the pace of negotiations.
Mr Ciobo told BBC Radio 4’s Today programme that if the UK invoked the European Union’s Article 50 in the first half of next year signalling its intention to leave then agreement would be at least two-and-a-half years off.
He said: “We want to do a deal with the UK when the time is right. The timing around that will in many respects be dictating by the UK. The discussions with the EU, the nature of those, the length of them is all yet to be determined.
“My formal advice is that, and this is from the UK side, the UK is unable to negotiate or sign an agreement prior to the formal exit from the EU.
“We can certainly have preliminary discussions and that’s part of what I’m doing here this week. Preliminary discussions around what a post-Brexit Australia-UK trade deal might look like.
“Some discussions about what our ambitions and aspirations are and there’s been good alignment in terms of those conversations.”
In a joint statement, Mr Fox and Mr Ciobo announced the creation of a working group to discuss areas of mutual co-operation including future investment opportunities.
The working group’s first meeting will be in Australia in January.
As well as considering bilateral links, it will look at relevant international trade standards including World Trade Organization rules.
“We want the working group to advance an agenda that will ensure the expeditious transition to free trade agreement negotiations when the UK has formally completed its negotiations to exit the EU,” the two men said.
Australia, which currently has a free trade deal with the EU, has said it wants to move quickly to negotiate direct arrangements with the UK.
Speaking in July, Australian Prime Minister Malcolm Turnbull said he wanted to take advantage of the UK’s exit from the EU to build a mutually beneficial partnership.