Thank you for contacting me about the proposed free trade agreement with Australia.
Australia is one of the UK’s closest allies. We share a head of state, the same language and the same values. Our people also enjoy deep and historic links of kinship and friendship, arguably unlike any other two nations.
A trade deal with Australia is an enormous opportunity for the UK. We are Australia’s second largest trading partner outside the Asia-Pacific and trade between our two countries was worth £18.8 billion in 2019.
I appreciate that you have concerns about the impact of a trade deal with Australia and its effect on food standards in particular. I can assure you that our food standards will never be lowered in pursuit of a trade deal and our farmers will not be undercut by this deal. Our world-leading animal welfare standards will be upheld throughout our trade negotiations and the Trade and Agriculture Commission will provide independent scrutiny of animal welfare in trade deals.
The trade agreement reached with Australia will not include an Investor-State Dispute Settlement mechanism. The Government stated at the outset of negotiations that it would ensure the right to regulate in the public interest continues to be protected in a trade deal and this has been delivered.
More broadly, I welcome the fact that the agreement will include a dedicated chapter on trade and the environment. This will contain provisions encouraging trade and investment in environmental goods and services which support shared environment objectives. For the first time, Australia has also agreed to specific mention of the Paris Agreement in a free trade deal – a deal which also affirms commitments to tackle climate change and acknowledges the role of global trade in these efforts.
The UK is a world leader in tackling climate change. We were the first major economy to legislate to be Net Zero by 2050 and have reduced emission by 44 per cent compared to 1990 levels. We are also phasing out coal power by 2025, 13 years earlier than Germany, and banning the sale of new petrol and diesel cars by 2030, ten years earlier than France.
The trade agreement will be scrutinised by Parliament in the usual way. The agreement in principle will need to be converted into a legal text which can then be signed by UK and Australia. An explanatory memorandum and impact assessment will be published alongside the legal text. These documents will be reviewed by committees in Parliament and by the independent Trade and Agriculture Commission.
Under the requirements of the Agriculture Act 2020, the Government will also be required to set out the extent to which the measures in the trade agreement are consistent with maintaining UK protections for human, animal or plant life or health, animal welfare and the environment.
Once advice from the Commission and the report has been published, the agreement will be laid before Parliament. Under the terms of the Constitutional Reform and Governance Act 2010, Parliament will have 21 days to raise concerns and resolve against ratification if it so chooses.
Food standards including hormone-fed beef
Maintaining high food standards is a red line in the UK’s trade negotiations. Australia has one of the highest animal welfare standards in the world, similar to our own, and scoring five out of five by the World Organisation of Animal Health (OIE). The practices of castration of chickens and production of foie gras, for example, are banned in Australia on welfare grounds but continue to be permitted in the EU.
On hormone-fed beef specifically, it is banned in the UK and will not be allowed to enter the UK market – this will not change under any FTA. Compromising on the high food standards we enjoy in the UK is red line in our trade negotiations - the UK will never allow it.
Benefits for Farmers
Global demand for meat is increasing rapidly. Meat consumption is projected to rise by nearly 73 per cent by 2050 and free trade agreements create huge new export opportunities for farmers. Demand is growing in the Asia-Pacific. The deal with Australia is also a gateway to joining CPTPP – a group of high-standards Pacific nations.
Any changes for sensitive goods such as beef and lamb can be staged, with a transition of 10 to 15 years the norm for trade deals with Australia. This means 10 to 15 years before we have the same zero tariff and zero quota arrangement with Australia that we currently have with the EU – a market which is only 31 miles from the Great Britain while Australia is nearly 9,500 miles away.
Australian meat ‘flooding’ the UK market
Australian export opportunities to the UK are likely to be limited. We are more likely to see prime steak for restaurants, rather than cheap imports flooding supermarket shelves. Australian imports of beef would likely displace current imports from the EU, not British produce. The EU accounts for the majority of beef imports into the UK with 237,928 tonnes imported in 2020 making up 98 per cent of total beef imports into the UK that year.
Additionally, Australian beef and lamb is already committed to the rapidly growing Asia-Pacific markets. Around 75 per cent of Australian beef exports, and 70 per cent sheep meat are imported to Asia-Pacific markets, where the costs of beef production can be twice as high than the UK in some markets. The prospect of substantive Australian imports of beef and sheep meat is very low.
There are strong ‘Buy British’ trends in the UK and strong support for British farmers – 81 per cent of beef sold in the UK is under the British logo, with Aldi, Budgens, the Co-op, Lidl, M&S, Morrisons and Waitrose all using 100 per cent British beef.
Scotland and Wales
This is a deal for the whole Union. The Government’s scoping assessments found that Wales and Scotland benefit in all modelled scenarios. Getting a good deal for the whole of the UK has been a priority throughout this negotiation and will continue to be in all our trade talks.
800 Scottish businesses exported goods worth £321 million to Australia in 2020. Reducing tariff barriers for our world class agri-food and drink industry could bolster Scotch Whisky exports to Australia, with beverages making up 39 per cent of Scotland’s goods exports to Australia, worth £126 million in 2020.
Scotland’s thriving financial service providers are expected to benefit from better access through digital and services provisions in this deal, alongside the new investment provisions which will bring greater opportunities to Scotland.
Climate change and the environment
I can assure you that ministers are determined to ensure that a trade deal will not threaten our ability to meet our environmental commitments. The Government’s outline approach to a trade deal with Australia states that the UK will seek to secure provisions that "support and help further the Government's ambition on climate change and achieving net-zero carbon emissions by 2050." It is also clear about securing provisions on promoting clean growth, trade in low carbon goods and services as well as on supporting research and innovation in green sectors, re-affirming commitments to the United Nations Framework Convention on Climate Change and the Paris Agreement and maintaining our right to regulate as we seek to decarbonise our economy. A full impact assessment of the deal will be published following the conclusion of negotiations and before implementation.
In conclusion, analysis suggests that UK exports to Australia could increase by up to £900 million if a trade deal is agreed. A deal would remove tariffs on all UK exports to Australia and create new provisions on digital, mobility, services, investment and procurement, bringing new opportunities for the whole country. I can also assure you that Parliament will scrutinise any deal in the usual way.
Thank you again for taking the time to contact me.
Craig Whittaker MP