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The UK has inked a new “historic” trade deal with Australia, which will eliminate tariffs on all UK goods, and, the government says, “boost jobs and businesses across the country”. However, questions have been raised about the future of the UK’s trade policy and its impact on British farmers and food standards.
Without safeguards in free trade deals, it is feared that British producers will be undercut by cheaper imports. At the first announcement that a deal was in the works, NFU president Minette Batters said it “would have serious implications for British farming”.
Following the signing of the deal, Minette added: “I am concerned that today’s announcement appears to have made no mention of animal welfare and environmental standards. While the government has previously been keen to highlight how our Free Trade Agreements will uphold our 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.
“We will need to know more about any provisions on animal welfare and the environment to ensure our high standards of production are not undermined by the terms of this deal,” she said.
Dominic Goudie, head of international trade at the FDF, welcomed the news of the deal and also called for more clarity. “It is now vital that we know the detail of what has been agreed to help businesses understand and begin to prepare for the new terms of trade.
“Food and drink manufacturers will hope that this deal will remove burdensome and unnecessary barriers to trade that will provide a timely boost for our industry’s post-Covid recovery. The terms must also ensure that consumers have continued confidence that any agreement maintains the highest food safety and animal welfare standards.”
The future of Britain’s food standards has been fiercely debated across the food and farming sectors since Brexit and the introduction of the Agriculture Bill. More than two million people signed a petition calling for food standards to be protected in law in the bill, but the Government instead opted to create an independent Trade and Agriculture Commission (TAC) to scrutinise the impact of trade deals.
Now, there are worries that a deal with Australia which does not protect standards will open the door to more deals with large trading nations that have lower standards than the UK, such as the US and Brazil. “The Prime Minister and his Government have pledged to level up the country,” Minette said. “Agreeing to a tariff-free trade deal with a major agricultural exporter, with no safeguards or review mechanisms, would do exactly the opposite of that commitment and set swathes of rural Britain backwards.” In a letter to Boris Johnson, the Green Alliance, a group of 10 leading green groups, added that the deal with Australia would set “a very dangerous precedent for future trade deals”.
A Government spokesperson has said that any deal signed will “include protections for the agriculture industry and will not undercut UK farmers or compromise our high standards”. The spokesperson continued, “Hormone-fed beef is banned in the UK and will not be allowed to enter the UK market – this won’t change under any FTA.”
However, according to Mark Lynch, partner at corporate finance house Oghma Partners, nations with larger herds, such as Australia, will still benefit from the economies of scale. “Economics dictates that UK farmers are at a scale disadvantage and already marginal producers, such as upland sheep farmers, will logically inevitably suffer. The question for farmers is do they trust the Government to subsidise their livelihoods via direct payments if the Government goes full bore at liberalisation and cheaper chops for UK consumers?”
Despite the allure of cheaper meat, recent research from Proagrica shows that more and more consumers are concerned about the standards of their food. The group found that nearly half of consumers, 46%, want their meat or fish to be ethically farmed and more than a third are now eating more organic food. What’s more, a recent survey by the Soil Association found that eight in 10 respondents were concerned about US-style industrial farming increasing in the UK, showing there is little appetite for lower food and farming standards in Britain. Three quarters of respondents said they would be willing to eat less chicken, and pay more for it, if it meant that the chicken had a better life.
“Many were making considered food choices to minimise their carbon footprints before the pandemic,” said Graeme McCracken, managing director of Proagrica. “However, our research shows Covid-19 has pushed more people to think about the types of food they are eating and how this is produced. With more shoppers actively looking for certification kitemarks when shopping, the pressure is growing across the food supply chain to prove ethical standards are being upheld.”
NFU’s Minette agreed that the pandemic has highlighted the importance of the food and farming sector. “It is vital that we have a thriving food production industry. We all saw the importance of this during the height of the pandemic; when the Government itself described farmers as key workers playing a vital role in delivering the nation’s food,” she said. “We remain of the view that it is wholly irresponsible for the Government to sign a trade deal with no tariffs or quotas on sensitive products and which therefore undermines our own domestic economy and food production industry.”
The Country Land and Business Association (CLA) agreed, adding that while concerns are focusing around the volume of Australian beef entering the market, with only 0.15% coming onto the domestic market, the focus should instead be on the creation of “suitable checks and balances” to safeguard Britain’s high standards.
“Our farmers are subject to stringent environmental and animal health and welfare standards, so it would be totally unacceptable to allow them to be undercut by imports produced to lower standards. Farming in the UK is a business and needs to be globally competitive so these factors must be at the heart of this new deal with Australia,” said CLA deputy president Mark Tufnell.
While questions remain around how the Australian deal may impact future free trade agreements, it is clear that following the Covid-19 pandemic, trust has been built between consumers, farmers and food retailers. Trade deals pose an opportunity to increase transparency and continue to build upon this trust, but only if Britain’s high standards are maintained.