opinion THE RIGHT BALANCE


Prime Minister Boris Johnson’s elation was understandable as he announced, in June, the UK-Australia free trade deal in a meeting with Australian PM Scott Morrison in London. This was the first major free trade deal concluded by the UK since its exit from the European Union. The Prime Minister hailed the deal as a ‘new dawn’ in the UK’s relationship with Australia, as the leaders also agreed to intensify cooperation on security, climate change and science and technology. Secretary of State for International Trade, Liz Truss, said that


the deal ‘delivered for Britain and shows what we can achieve as a sovereign trading nation’, adding that it was a ‘fundamentally liberalizing agreement that removes tariffs on all British goods, opens new opportunities for our services providers and tech firms, and makes it easier for our people to travel and work together’. The agreement paved the way for the UK to join the Trans-Pacific Partnership, a £9 trillion free trade area home to some of the biggest consumer markets of the present and future. How might the deal affect UK farmers, the agricultural supply industry’s customers? Under the deal, Australia will be able to send a certain amount of


agricultural goods per year to the UK without any payment of tariffs on imports. Over time, the limits on these exports will increase. And, after fifteen years, there will be no quotas or tariffs on agricultural produce, apart from, it is reported, long-grain rice. One example of Australian agricultural exports that has attracted


comment is beef. To start with, 35,000 tonnes will be allowed into the UK before tariffs kick in. But over the next ten years this tariff-free limit will increase to 110,000 tonnes. Tariff-free deals related to dairy products and sugar also have the potential to affect British dairy farmers and arable growers. The National Farmers Union (NFU) has made is views known


about the potential impact of trade deals that completely eliminated all tariffs on imports from the biggest agricultural exporters in the world. It said that while details remained ‘very thin on the ground’’ it accepted that the agreement appeared to include important safeguards that attempted to strike a balance between liberalizing trade and supporting UK farm businesses, as well as a reasonable time period in which to allow UK farmers to adjust to the new trading environment. The devil, as always, is in the detail. The NFU has noted that


they await further details to understand whether these safeguards to be incorporated in future agreements are sufficient, and, in particular, that ‘they can be deployed effectively should imports rise to an unmanageable level leading to significant market disruption’. One significant element appears to have been missing from


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the preliminary announcement which will be of particular interest and concern to the agricultural supply trade and that is the fact that, as the NFU observed, there was no mention of animal welfare and environmental standards. While the government has previously been keen to highlight how the UK’s Free Trade Agreements will uphold the UK’s high standards of food production, there has always been a question mark over how this can be achieved while opening up our markets to food produced to different standards. The agricultural supply trade will need to know much more about any provisions on animal welfare and the environment to ensure that the UK’s high standards of production are not undermined by the terms of this and succeeding deals. It will be vitally important for the UK to establish its negotiating


position with other countries with which it enters into free trade agreement and to demonstrate that the UK position is bounded by certain well-defined parameters. One of these is the integral structure of British agriculture. It has to be said, at once, that the agricultural supply trade in the UK has a strongly vested interest in the continuing structure of the nation’s agricultural fundamentals, rather than a decline into the agricultural and rural desuetude that characterized the years between the first and second world wars. In doing so, there is also a need to accept that many countries with which the UK would like to establish free trade agreements have natural advantages particularly where agriculture is concerned. It is likely, although no one has yet got round to publicly doing the sums, that Australian beef will be highly competitive with its British equivalent, although the cost of transport from the southern to the northern hemisphere will be a significant element that will have to be taken into account. Selling Australian agricultural commodities into the northern


hemisphere will always be hard fought, and the recent deal will be welcome for Australian farmers. Landing this agreement was also important from a British perspective. Officials with insight into the dynamics say the Australian trade deal was important strategically to the UK because of where Britain needs to be seen getting to post-Brexit. The situation as regards a deal between the UK and the United States is more complex. The UK wants a bilateral trade deal with the United States but pursuing that will take time. The US Congress, post-Trump, leans protectionist and President, Joe Biden, has other foreign policy priorities, including reviving global action on climate change. The deal agreed between the UK and Australia will continue to


be scrutinized for its effects on the UK agricultural sector. A balance must be struck between the interests of UK agriculture and the wider interests of the UK economy. Not an easy calculation but one that must be made.


Comment section is sponsored by Compound Feed Engineering Ltd www.cfegroup.com


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