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Liz Truss has defended plans for a post-Brexit trade deal with Australia amid reports of a cabinet split over the impact on British farmers of granting tariff-free access to the UK market.
The trade secretary said a deal with Australia would benefit farmers across the UK by opening up a key market while also paving the way for growth in exports across Asia. She promised that the government would protect British farmers from overseas importers using “unfair practices” to undercut them in the domestic market.
Answering questions from MPs on the Commons international trade committee, she said: “[It] will have benefits for all nations and regions of the UK and all industries including the agriculture industry.
“I’ve been very clear with them [farmers] that of course I’m always looking to make sure, as I have committed to, that British farmers will not be undercut by unfair practices from elsewhere. We will make sure in all the deals we do that British farming thrives and I’m absolutely confident that will be achieved through the Australia deal.”
Farming industry leaders fear that granting tariff-free access to the UK market– meaning no taxes would be paid on imports – would lead to a sharp rise in cheaply produced Australian beef, lamb and sugar on British supermarket shelves, putting domestic producers under pressure.
There are also warnings about animal welfare standards and environmental implications. Sheep and beef farmers in remote parts of Scotland and Wales are thought to be most at risk.
Truss said the government was in a “sprint” to reach an agreement in principle with Australia by early June, before a key G7 summit next month hosted by the UK in Cornwall. The Australian deal is considered crucial as it would mark the first free trade agreement negotiated since Brexit that is not a rollover of existing arrangements with EU trade partners. However, it would add just 0.01% to 0.02% to the size of Britain’s economy over 15 years, according to government estimates.
There have been reports of an internal battle over key elements of the deal and the potential impact on British farmers. According to the Financial Times, Truss has met with stiff opposition from George Eustice, the environment secretary, and Michael Gove, the Cabinet Office minister.
Truss received backing from Boris Johnson on Wednesday as the prime minister told the Commons that tariff-free trade with Australia represented a “massive opportunity” for the UK.
Responding to questions from the Scottish National party’s Westminster leader, Ian Blackford, he said: “[He] is grossly underestimating the ability of the people of this country, the agricultural communities of this country, the farming industry to make the most of free trade. This is a country that grew successful and prosperous on free trade on exporting around the world.”
The president of the National Farmers’ Union, Minette Batters, warned the government there was a risk of “irreversible damage” for farmers across the country. “It must recognise that opening up zero-tariff trade on all imports of products such as beef and lamb means British farming, working to its current high standards, will struggle to compete,” she said.
Downplaying concerns over the impact, Truss told MPs that the government would protect domestic business interests. Without outlining specific steps that ministers would take, she said the government believed in trade liberalisation on a fair basis.
“It can’t be the case that British industry is undercut by unfair practices, whether that’s environmental degradation, whether that’s unfair practices on animal welfare, or whether that’s unfair practices through state-owned enterprises and industrial subsidies, and that is our overall principle that we operate on,” she said.
Truss also said an Australian deal would act as a “gateway” to UK membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP), an arrangement between 11 nations including Australia, Japan, Canada, Mexico, New Zealand and Vietnam.
“We’re seeing 66% of the world’s middle classes are going to be in Asia by 2030, growing demand for products like beef and lamb. So both Australian access and CPTTP access I think is positive for British farming,” she said.