Australian trade deal may be template for other post-Brexit agreements

Boris Johnson chaired a meeting of senior ministers in Downing Street on Thursday amid a fierce dispute within his cabinet over the scope of a trade deal with Australia. Farming groups have warned about the impact of granting tariff-free, quota-free access to Australian beef and lamb on British agriculture.

While agriculture secretary George Eustice and cabinet office minister Michael Gove are reported to oppose the move, the smart money is on Johnson agreeing to Australia's demand for full market access for its meat exporters. Among those believed to be arguing for an expansive deal are international trade secretary Liz Truss and Brexit minister David Frost.

The Australian deal would be the first major trade agreement Britain has negotiated that is not a rollover of arrangements London enjoyed with third countries as a member of the European Union. Failure to agree terms with such a close, like-minded ally could send a signal to other potential trade partners that Global Britain is less buccaneering than advertised.

Welsh first minister Mark Drakeford warned on Thursday that allowing tariff-free imports of Australian lamb could threaten his country's identity as it hits hill farmers in the Welsh-speaking heartlands.

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“We’re talking here about the things that make Wales Wales – that’s what’s at stake here,” he told the BBC.

“How can our hill farmers compete with Australian climates? How can our hill farmers compete with the space that is available for the huge farms that they have in Australia? How can we compete when our standards of animal welfare and environmental standards are different and are higher than they are in Australia?”

The Scottish National Party (SNP) has made similar protests on behalf of Scottish beef producers, who cannot compete with Australia's massive feedlots and ranches, a complaint echoed by farmers' groups throughout Britain.

The trade deal could hurt Irish farmers too. Half of Ireland's beef exports go to the United Kingdom, valued at almost €1 billion a year and accounting for almost all of Britain's beef imports from the EU. More Australian beef would not only offer competition in the British market but could drive exports to the EU of British beef displaced from the domestic market.

Britain's food products enjoy tariff-free, quota-free access to the EU market so Irish beef could face more competition in both the British and European markets. Northern Irish farmers who supply the market in Great Britain could also be affected but they would enjoy access to the Australian market, while the Northern Ireland protocol would block tariff-free Australian meat imports to the North.

‘Level playing field’

Trade experts suggest that farmers’ fears about the deal may be unjustified because Australia sends most of its meat exports to Asian countries. Its beef is not especially cheap and although 40 per cent of Australian beef is from cattle raised with hormonal growth enhancers, the meat it exports tend to be hormone-free.

Tariff-free access is likely to be phased in over 10-15 years and the deal could include the kind of “level playing field” conditions Britain found so offensive in negotiations with the EU. Earlier this year, Britain’s trade and agriculture commission, which includes farming industry figures, recommended that Britain should grant tariff-free, quota-free access for food products in future trade deals but with conditions.

It should “ensure that agri-food imports meet relevant UK and international standards on food safety and biosecurity”. And deals should “match tariff-free market access to relevant climate, environment, animal welfare and ethical standards, remedying competition issues arising where permitted imports do not meet relevant UK and international standards”.

Weak farming lobby

The British government wants the Australian trade deal to be agreed in time for next month's G7 summit in Cornwall, which Australia's prime minister will attend as a guest. It sees the agreement as a template for other big, post-Brexit trade deals – and that is just what farmers in Ireland as well as Britain should fear.

One of Britain’s big negotiating advantages in trade talks is that its weak farming lobby and a popular enthusiasm for cheap food means it can make concessions more easily than many countries on market access for agricultural products. Most potential trade partners prioritise market access for their farmers, while Britain’s priority is opening up markets for the services that make up 80 per cent of its economy.

Australian beef and lamb may represent only a modest threat but if Britain offers similar terms to other big producers like Brazil, the consequences for Irish farming could be immense.