Trade deal with Australia will bring minimal benefit to UK economy and poses risks for farmers, experts say Business News

A trade deal between the UK and Australia will bring minimal benefit to the UK economy while posing significant risks for UK farmers, industry executives and trade experts have warned.

The government announced an agreement in principle on a pact with Australia on Tuesday. Boris Johnson said the UK’s first major trade deal after Brexit would create “fantastic opportunities” for the UK.

However, many details have yet to be finalized and farmers fear the terms will mean they will be undermined by cheap imports.

Animal welfare activists also said the deal would allow low-welfare products such as hormone-treated beef to enter the UK.

The agreement will also allow UK nationals under the age of 35 to travel freely within Australia.

Impact on the economy

David Henig, UK director of the European Center for International Political Economy, said the deal may not even deliver the 0.02% increase in GDP the government has estimated and that the actual impact may be closer zero.

The government’s forecast is based on “heroic assumptions” that previous trade deals have failed to achieve, he tweeted, adding that the details announced on Tuesday contain nothing we don’t already know.

“There had to be an announcement because the Australian Prime Minister was here. But it doesn’t look like the negotiations are over.”

He also suggested that the UK may have played its role badly in the negotiations: “Australia got its main demands from the UK – agriculture. The UK did not have a top request from Australia therefore none are reported. If we find one in the future, too late, we’ve already given them what they wanted. “

Sam Lowe, senior researcher at the Center for European Reform, tweeted that “trade deals don’t do much for overall GDP, either positively or negatively” because the main benefits come from lower tariffs, which are already Quite low.

“Significant damage”

Angus Brendan MacNeil, chair of the Commons International Trade Committee, expressed concern that the government had ceded too much ground to Australia.

“In its rush to reach an initial deal, I fear the government may sign something that brings significant damage as well as benefits.

“The views of the entire agricultural sector in particular are no longer a secret now, including those of decentralized countries, which are particularly concerned about being undermined by the cheaper meat and dairy products of below”.


The government said UK farmers would be protected by a cap on duty-free imports for 15 years, using measures including tariff rate quotas.

National Farmers Union President Minette Batters asked for more information on animal welfare and environmental provisions “to ensure that our high standards of production are not compromised by the terms of This agreement “.

She added: ‘The ultimate test of this trade deal will be whether it helps move agriculture across the world on a more sustainable basis, or whether it instead compromises British agriculture and simply exports the impact on the environment and animal welfare of the food we eat. “

Joe Spencer, a partner at the accounting firm MHA MacIntyre Hudson, called the deal “unfavorable.”

“UK farmers are increasingly being asked to protect the environment, while the government is simultaneously withdrawing its support,” said Mr Spencer.

“Unfavorable trade deals – like this one as of the date of negotiations with Australia – will only add more pressure on the industry which is working hard to move in one direction when, one might suggest, it will be taken away from it. carpet at the same time. .

“Farmers are right to be wary. Trade agreements of the type the government has negotiated with Australia offer few benefits to the industry and perhaps only small benefits to consumers (in terms of lower prices). The industry (and the general public) will pay particular attention to how these trade agreements ensure food safety and livestock welfare standards. “

Consumer price

Downing Street says removing tariffs under the deal will mean cheaper Australian wines, swimwear and confectionery, “increasing choice for UK consumers and saving consumers up to £ 34million a year. households “.

scotch whiskey

The Scotch whiskey industry has been touted as the one that would benefit from the trade deal, as it will now have duty-free access to the Australian market.

Kate Betts, CEO of the Scotch Whiskey Association, welcomed the removal of a 5 percent tariff.

“This will help Scotch Whiskey distillers continue to expand their exports to Australia, which have almost doubled over the past decade, making Australia our eighth largest market by value,” said Ms Bettes.

“It is also important to us that trade with Australia is now duty free for Scotch Whiskey – our preference is still to trade duty free, which allows Scotch Whiskey to be competitive on a competitive footing. equality and on the strength of our reputation for quality. “

The association calls for “more …

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This notice was published: 2021-06-15 12:28:42

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