A much talked about future trade deal between Australia and the UK could contribute to enormous "turmoil" in parts of Wales, according to the country's First Minister Carwyn Jones.

Key points: Fears competition from Australia/NZ could hurt Welsh sheep farmers

Fears competition from Australia/NZ could hurt Welsh sheep farmers Australia "holds all the aces" in trade negotiations, First Minister says

Australia "holds all the aces" in trade negotiations, First Minister says First Minister and sheep farmers calling for UK to keep Britain in EU customs union

Mr Jones, who has led the Welsh Labour Government for nearly nine years, said a deal combined with Brexit has the potential to put many sheep farmers out of business and forever change life in many rural communities.

"There's no country in the world that could cope with those circumstances arriving at the same time," Mr Jones said.

"We'd see turmoil in some small rural towns, which are the backbone of the Welsh language."

Carwyn Jones says Australia "holds all the aces" in trade talks with the UK. ( ABC News: David Sciasci )

Welsh hill farmers are well-known in Britain for the lamb they produce, but many rely on European Union subsidies to survive.

Post-Brexit those subsidies could go, access to the crucial European export market could be curtailed, and there is also the prospect of fresh competition from sheep farmers in the southern hemisphere if — as promised — the UK quickly negotiates trade deals with Australia and New Zealand.

Garry Williams, a hill farmer based in the west of the Brecon Beacons mountain range, described the challenges as a "perfect storm" of problems.

"There's no question our way of life is at risk," he said.

"I've got nothing against Australians … but if this all hits at once it might be like, 'last one out turn the lights out'."

Trade promises a 'great ploy' by Australia

Welsh hill farmers are well-known in Britain for the lamb they produce. ( ABC News: David Sciasci )

Both the UK and Australia have repeatedly spoken of their intention to quickly do a post-Brexit trade deal and have set up a working group.

There is speculation Britain would like to export financial and IT services, while Australia may demand good access to agriculture in return, though diplomats say the UK is only ever likely to be a "niche" market for Aussie farmers.

Free marketeers, like Julian Jessop from the London-based Institute of Economic Affairs, argued a broad deal with low tariffs would likely see lower food prices for UK shoppers.

"Basic economics tell you if you have more competition and more choice you will have lower prices as a result," he said.

Prime Minister Malcolm Turnbull made similar statements in favour of free trade during his recent trip through Europe.

But Mr Jones said he sees Australia's public comments as a "great ploy".

"Australia's much more experienced at this than the UK is," he said.

"When was the last time the UK negotiated a free trade deal? Donkey's years ago.

"Australia holds all the aces.

"Trade deals take years … if you do it in a short period of time the people who know what they are doing are going to have the advantage."

Mr Jones and the sheep farmers are calling for the UK Government to keep Britain in the European customs union or in some type of EU customs partnership.

Garry Williams described post-Brexit negotiations and the prospect of competition as a "perfect storm". ( ABC News: David Sciasci )

That may make a wide-ranging trade deal with Australia impossible.

"We'd like to think common sense would prevail," Mr Williams said, as he fed his ewes that had recently given birth.

"But you know, we really have to wait and see."