Downing Street pact
UK Australia deal sparks row over who benefits
Liz Truss: clashed over deal
A trade deal between the UK and Australia, hailed by the Prime Minister as a “new dawn”, has been criticised as a sell-out of British agriculture.
Boris Johnson and his Australian counterpart Scott Morrison agreed the deal in Downing Street on Monday over a dinner comprising Welsh lamb, Scottish smoked salmon and Australian wine.
The deal will see tariffs gradually eliminated on all goods traded between the two over the next 15 years.
Mr Johnson hailed the deal as “a new dawn” in relations with Australia.
“This is global Britain at its best – looking outwards and striking deals that deepen our alliances and help ensure every part of the country builds back better from the pandemic,” said the PM.
But the Labour Party has accused the government of failing Britain’s farmers in the same way it has the British fishing industry, after the Australian government revealed that Australia would be able to increase its beef exports to the UK by more than sixty times their 2020 levels in the first year of the deal before any tariffs would kick in.
It could see it export four times more beef to the UK in the first year of the deal than they did to the whole of Europe in 2020 before any tariffs would kick in.
The UK would leap from 27th to 6th place in the global ranking of Australia’s biggest beef export markets if they use their full quota in the first year.
Emily Thornberry, Labour’s Shadow Secretary for International Trade, said: “With this deal, and the precedent it sets for New Zealand, America, Canada and Brazil, the government will send thousands of farmers to the wall, undermine our standards of animal welfare and environmental protection, and threaten the conservation of our countryside.”
The UK government said deal is expected to add around 0.02% to UK GDP, described by Labour as “minuscule”.
Scottish Trade Minister Ivan McKee said: “Today’s announcement confirms our fears that the UK Government has signed up to a deal that will be damaging for farmers and crofters. A fifteen-year cap on imports will provide no comfort for farming communities.”
The UK Government said the deal will save households up to £34m a year.
It will include intensified co-operation on security, climate change, science and technology, it said.
More Britons and Australians will be given the opportunity to live and work in the other country.
Unlike the EU “rollover deals” which the UK has signed with other countries, this is the first to be negotiated from scratch since the UK left the EU.
It is expected to open doors to the UK joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The UK government insists this could provide British farmers with huge opportunities, while the Scottish and Welsh governments, together with a number of food and drink trade bodies and farmers believe it will be damaging.
The Australian Broadcasting Corporation reported Australian Trade Minister Dan Tehan, who held talks in London earlier this year with International Trade Secretary Liz Truss called the pact a “win for jobs, businesses, free trade and highlights what two liberal democracies can achieve while working together”.
Australian British Chamber of Commerce chief executive David McCredie tweeted the deal would create “many great opportunities for trade, investment and collaboration”.
However, before the deal was signed there was a backlash from Scottish and Welsh ministers and even the Environment Secretary, George Eustice has clashed with Ms Truss over food standards and cheap imports.
Farmers in Australia use some hormone growth promoters, pesticides, and feed additives that are banned in the UK.
The National Farmers Union says that because of the scale of farms in Australia beef can be produced at a lower cost. Scottish farmers feel particularly vulnerable to cheap imports.
Major contributors to Scotland’s farming industry, including Scottish Land and Estates, Scottish Butchers Federation and the National Sheep Association Scotland this week co-signed a letter from SNP MSP Jim Fairlie to Mr Johnson about their concerns around the tariff-free trade deal with Australia.
At the weekend Scotland’s Rural Affairs Secretary Mairi Gougeon wrote to Ms Truss echoing the concerns of 14 Scottish industry representatives over the proposed deal and calling for the UK Government to publish an assessment of the cumulative impact of free trade agreements with Australia, Canada, New Zealand and the United States.
However the outline agreement sees a cap on tariff-free imports for 15 years.
Scottish Secretary Alister Jack, said: “This extensive trade deal with Australia is very welcome news for Scotland and the whole of the UK.
“Australia is the world’s eighth largest market for Scotch whisky exports, worth £113m last year. The removal of tariffs presents a fantastic opportunity for our iconic distilleries.
“Scotland’s financial services, manufacturing and pharmaceutical sectors will also receive a boost.
“Measures to protect the UK’s agriculture industry and maintain high standards will also help Scottish farmers make the most of international opportunities opened up by this deal.”
Chief executive of the Scotch Whisky Association Karen Betts said: “It’s very good to see the removal of the 5% tariff on Scotch Whisky in the Agreement in Principle between the UK and Australia.
Karen Betts: await further details (pic: Terry Murden)
“This will help Scotch Whisky distillers continue to expand exports to Australia, which have almost doubled over the last decade, making Australia our eight largest market by value.
“It’s also important to us that trade with Australia is now tariff-free for Scotch Whisky – our preference is always for tariff-free trade, which enables Scotch Whisky to compete on a level playing field and on the strength of our reputation for quality.
“We await further details of the Agreement in Principle. A framework for addressing regulatory barriers to trade with Australia, to ensure greater legal protection and tax fairness for Scotch Whisky, is also important to us, and – if delivered in this agreement – will be a real boost for the industry.”