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Boris Johnson is on a collision course with British farmers after throwing his support behind a 15-year transition to a zero-tariff, zero-quota trade deal with Australia.
The prime minister held talks with cabinet ministers on Thursday morning (20 May) about the prospects of a deal with Australia – the first major post-Brexit trade deal.
Mr Johnson backed international trade secretary Liz Truss and plans for a 10-to-15-year transition before a zero-tariff regime is in place, according to The Times.
Tariffs on Australian food imports and goods would be phased out slowly to monitor the effect on UK agriculture.
Defra secretary George Eustice and cabinet officer Michael Gove are believed to have expressed reservations about offering Australia a free-trade deal on food imports amid concerns that it would risk putting British farmers out of business because they would be unable to compete with unrestricted Australian imports.
High standards ‘upheld’
The Department for International Trade (DiT) has tried to allay fears that a free-trade deal with Australia would flood the UK with cheap Australian food imports.
A spokesman said: “Any deal we sign with Australia will include protections for the agriculture industry and will not undercut UK farmers or compromise our high standards.
“Typically, any tariff liberalisation is staged over time, with safeguards built in. Australian meat accounts for a very low proportion of total UK imports, and is produced to high standards.”
For example, the UK government imports around 250,000 tonnes of beef each year, of which 91% comes from the EU, with 190,000 tonnes from Ireland alone.
Last year less than 1% of Australian beef exports were for the UK market, accounting for 1% of UK beef imports. However, 14% of sheep imports came from Australia.
Australia’s biggest beef exporter, the Australian Agriculture Company (AAco), has said Australian beef exports to the UK “could increase tenfold” if both countries sign a free-trade deal.
AAco chief executive Hugh Killen told the Financial Times: “In the event of a free trade deal that removes tariffs and quotas we could see [Australian beef] exports double or triple.
“In fact, given exports are so small now, it’s possible they could even increase tenfold.”
‘Set a precedent’
The National Farmers Union has warned that if the UK government offers Australia tariff-free, quota-free access to UK markets, it would “set a precedent” for trade deals, and other countries, including the US, Canada and New Zealand, would seek the same terms.
British farmers fear this could trigger a race to the bottom and an influx of cheap food imports would make it impossible for them to compete.
Ms Truss told a parliamentary committee on Wednesday (19 May) that the UK is “in a sprint” to sign a trade agreement in principle with Australia by early June.
She described the UK-Australia deal as the “gateway” to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP) – a trade agreement among 11 nations including Australia, New Zealand, Canada, Mexico, Japan and Chile – which she said would offer “huge opportunities” for British agriculture.
NI farm minister airs ‘strong opposition’ to zero-tariff deal
Stormont farm minister Edwin Poots has written to Defra secretary George Eustice to express his strong opposition to the prospect of a UK-Australia zero-tariff, zero-quota free-trade agreement (FTA).
An FTA with Australia that allowed tariff- and quota-free access for sensitive agricultural products would be damaging to Northern Ireland’s beef and sheep trade, he warned. “The prospect of such a deal presents a high level of risk to Northern Ireland and UK farmers,”said Mr Poots.
“Therefore, I believe that the UK should maintain tariff protection at present levels for all agricultural products where the UK has a significant production interest.”
Mr Poots said Australian livestock farmers can produce beef and sheep meat at a much lower cost than UK farmers, due to the availability of land, climate, and lower standards.
Consequently, there is a lot of potential for Australian beef and sheep exports to the UK to expand substantially over time if tariffs are eliminated, he added.
“Australian beef and sheep products have the potential to undercut UK producers and to reduce Northern Ireland’s market share in Great Britain, which is our most important market for these products.”
Mr Poots has been elected as the new leader of the Democratic Unionist Party and will replace Arlene Foster on 28 May.