Washington, Feb 09: The United States and Australia said on Sunday they have reached a comprehensive free trade agreement that will leave politically sensitive US protections for sugar in place. Negotiators struck the agreement after a final three weeks of intense negotiations, including a conversation between US President Bush and Australian Prime Minister John Howard on Saturday that helped clinch the deal. With Bush facing a potentially tough re-election race this year, and sugar producers firmly opposed to any cuts in their import protection, US negotiators rebuffed Australia's demand for more market access for one of its main farm exports. US sugar producers fear opening the U.S. market to more Australian sugar would send US prices tumbling and set a bad precedent for other expected free trade agreements with sugar-exporting countries. Nonetheless, Australian Trade Minister Mark Vaile said the agreement was a "historic achievement" that would benefit Australia by linking it to the world's largest economy. "We had to take a balanced judgement in terms of the overall benefit," Vaile said. The agreement also phases out US tariffs on Australia beef over 18 years leading eventually to free trade in that sector. A modest increase in the current duty-free quota for Australian beef would take effect after US exports return to the levels seen before mad cow disease was found in the United States, or three years after the agreement takes effect, whichever comes first. The pact provides a slightly larger duty-free quota for Australian dairy farmers to sell their goods in the United States, but keeps steep tariffs in place. US dairy and beef producers have lobbied hard against the agreement, which they argued would open the US market to price-depressing competition without providing any new US exports opportunities. However, the still-struggling US manufacturing sector has been one of the biggest supporters of the pact. US Trade Representative Robert Zoellick said the agreement would give US factories a boost by eliminating tariffs on more than 99 percent of U.S. manufactured exports to Australia the first day the pact takes effect. Both the U.S. Congress and Australian parliament have to approve the deal. Zoellick told reporters he would consult with lawmakers on when to send the deal to Congress. "This superb agreement can result in close to USD 2 billion in new U.S. manufactured goods exports," said Jerry Jasinowski, president of the National Association of Manufacturers. The pact allows Canberra to maintain its state-subsidised prescription drug program that had been targeted by big US drug companies as an unfair trade barrier. The agreement also allows Australia to keep its "single-desk," or monopoly, export arrangements for wheat, sugar, rice, wheat and barley, despite US desires to see those opened to competition. Bureau Report