Agricultural Exports from Australia: Tariffs

(Urgent Question): To ask the Secretary of State for International Trade, if she will make a statement on the United Kingdom’s proposed tariff offer to the Australian Government on their agricultural exports.

Our trade agreement with Australia is very likely to be the first from-scratch deal that we have struck outside the European Union. It is a major milestone for global Britain and a major prize secured for our newly independent trade policy. It is on course to slash tariffs on iconic UK exports, saving business potentially about £115 million a year.

The deal will be the most advanced that Australia has struck with any nation bar New Zealand, and will, we expect, be particularly forward-leaning in areas such as services, procurement and digital trade. It will be a great deal for the UK, and our farmers will continue to thrive. The agreement is a gateway into the massive CPTPP—comprehensive and progressive agreement for trans-Pacific partnership—free trade area in the Asia-Pacific, and opens doors for our farmers into some of the biggest economies of now and the future.

Our food is among the best in the world and incredibly competitive. We should be positive, not fearful, of the opportunities that exist for our agriculture and our farmers. We give the EU preferential trading terms, which I do not recall those on the Opposition Benches objecting to. We should be unafraid of giving our Australian cousins something similar, taking the chance to deepen trading ties with one of our closest friends and allies.

Australian meat is high quality and produced to high standards, and it arrives here in low volume. Meanwhile, Australia has some of the highest animal welfare standards in the world. The UK accounts for just 0.15% of Australian beef exports, and our analysis suggests that any increase in imports is more likely to displace food arriving from the EU. Any deal we strike will contain protections for our farmers, any liberalisation will be staged over time, and any agreement is likely to include safeguards to defend against import surges. Negotiators are now working to agree the outstanding elements with the aim of reaching agreement in principle in June.

Let me make it clear at the outset that we support a trade deal with Australia that is designed in British interests and will create jobs in our economy and increase our exports and growth. What we cannot support is a deal being rushed through in time for the G7 summit without proper debate or consultation, let alone the advance scrutiny that the Government promised by the Trade and Agriculture Commission. We cannot support a deal on agricultural tariffs that will cost jobs in our farming communities, undercut our food standards, increase our carbon offshoring and open the door to the destruction of our farming industry through further lopsided trade deals.

As an exercise in intellectual honesty, I would just ask all those on the Conservative Benches, in the right-wing think-tanks and on the newspaper comment pages to consider for one second how they would have reacted if it was Brussels that had negotiated this trade deal and sold out Britain’s farmers. They would have been rightly furious, and they should not be any less so when it is their own Government who are doing the selling out. However, what matters now is to try to improve the deal on the table before it is signed in Cornwall.

Assuming that it is now too late to remove the offer of zero tariffs, can I ask the Minister of State to pursue three other changes? First, will he put in place a safeguard trigger—which, as I am sure he knows, Australia was willing to accept in its deals with Japan, China and the United States—to protect British farmers against surges in cheap imports? Secondly, will he make it clear that zero tariffs will apply only to Australian products that meet the same standards that British farmers are required to meet on food safety, animal welfare and environmental protections? Thirdly, will he insert a review clause into the deal so that, if its impact is even more negative than was forecast by the Government last year, there is scope both to amend the deal and to learn from it in future trade deals? Those are the bare minimum changes that we need to mitigate the damage that this rushed and botched negotiation is inevitably going to do, so I hope that the Minister of State will agree to pursue all three of those priorities today.

I thank the right hon. Lady again for tabling this question. Let me answer each and every one of her questions. First, she said that this had been rushed through. I was at the Department at its inception in the summer of 2016, and one of the very first things that was announced in 2017 was our target for our initial batch of free trade agreements, which included Australia. That was back in 2017 and repeated by the current Secretary of State in 2019. She talked about the Trade and Agriculture Commission. This will be up and running soon—[Interruption.] If she is that keen to see it up and running soon, she might have supported the passage of the Trade Bill, which became the Trade Act 2021 just before Easter; instead, we saw her repeated manoeuvres to delay and undercut the Bill at the time.

The right hon. Lady talked about any deal potentially undercutting our food standards. I was absolutely clear in the statement that there will be no compromise on our standards of animal welfare, food safety and the environment. That is our manifesto commitment, and it has often been repeated. She made a point about emissions and food miles. There is controversy in relation to meat production emissions, but no more than 5% of emissions are reckoned to come from the transportation across oceans of that product.

Let us look at Australia’s current trade patterns. Only 0.15% of Australian exports come to the UK. Australia sells 75% of its beef and 70% of its lamb into Asia at the moment. That is where the fast-growing markets are, and that is something that we in the UK are seeking to get access to ourselves through agreements such as the CPTPP and other trade agreements. There is a big opportunity here for UK agriculture.

The right hon. Lady asked about a safeguard trigger. As I said in my opening statement, safeguard triggers are typical of free trade agreements. This is still a free trade agreement that is subject to a live negotiation, but I would say that these things are typical of free trade agreements. She asked if we would have zero tariffs if the Australian produce met our standards. The Australian lamb and beef coming into the market today meets our standards. There will be no change as a result of the free trade agreement to our standards. Australian beef and lamb will continue to have to meet our import standards. If that is the only objection to zero tariffs, I take it that she would welcome such a situation if there were zero tariffs in the deal. She also asked about a review clause. Again, that is a typical feature of free trade agreements.

We have all heard much in recent days about the threat posed by large-scale, low-cost Australian meat production, but we all know that consumers care about quality. What opportunities does the Minister see in a free trade agreement with Australia for the hill farmers of Aberconwy, whose grass- fed stock can run freely across the rain-soaked hills of north Wales, breathing in the clean mountain air?

My hon. Friend is a doughty champion for his constituents in general and his farmers in particular. There are great opportunities worldwide for the Welsh lamb sector. For example, British lamb is currently not allowed at all in America. We are looking at fast-growing Asian markets, and I refer back to the importance of the Australia deal as a springboard to CPTPP. Half of today’s global middle class is in Asia, and almost 90% of the next billion middle-class people in this world will be in Asia. That is where the growing demand for high-quality meat, such as the Welsh lamb produced by my hon. Friend’s constituents, can be found, and that is where I see great prospects and great opportunities for his constituents, his farmers and farmers across the United Kingdom.

Everybody wants more trade deals to be done, but the Minister simply is not listening to those at the sharp end. Martin Kennedy, president of the National Farmers Union Scotland, said:

“Our seafood industry has already been hit hard by Brexit and now Scottish farming is next to be sacrificed—and once again it’s Scotland’s key industries which will bear the brunt of a Tory Brexit people here did not vote for”.

NFU England has warned Ministers that farmers will struggle to compete if zero-tariff trade on lamb or beef went ahead. The RSPCA has warned that tariff-free access for Australia would betray the public, farmers and animals. Those are just some of the warnings to Government from those affected, not from politicians. Will the Minister rule out tariff-free access for Australian agricultural produce?

Nothing must threaten our actions to mitigate climate change. Australia is home to large energy and mining firms and has lagged behind other advanced economies when it comes to addressing climate change. Will the Minister guarantee that no deal with Australia will include investor-state dispute settlement mechanisms, or will he press ahead and betray not only today’s public, farmers and animals, but those of future generations?

It is always good to hear from the hon. Gentleman. I noticed in his series of questions that there was, for example, no mention of the £113 million-worth of Scotch whisky sold into Australia at present that is subject to 5% tariffs. Australia is actually the eighth largest market by volume for Scotch and has been growing at 7% per annum. There was no mention of the opportunities for Scottish financial services, FinTech or agrifood more generally—we actually have an agrifood trade surplus with Australia.

The hon. Gentleman quotes NFU Scotland, which has great people. I have met Martin Kennedy personally twice in the last week, as well as the Scottish Government to discuss the prospect of this deal.

Let me reiterate: there will be no change in our standards as a result of this trade deal. We are absolutely committed to no compromise on our animal welfare, food safety or environmental standards.

The hon. Gentleman asked me to rule out tariff-free access to Australian agricultural products. There already is tariff-free access through an autonomous tariff rate quota. I think he seeks a rolling back of the trade arrangements we already have with Australia.

The hon. Gentleman asked about ISDS. It is a live negotiation, and there will be a chapter on investment. We are huge investors in each other’s markets, and I remind him that the UK has never lost an ISDS case.

However, the hon. Gentleman has serious questions to answer, too. Never in 20 years has the SNP supported any trade deal done by the UK or even by the EU, even though key sectors of the Scottish economy, such as whisky, apparel and fisheries, are dependent on our trade. SNP Members voted for a no-deal Brexit. They voted against deals with our friends, such as Canada, South Korea and South Africa. They did not support deals with Japan or Singapore. Whatever assurances I have given him today, or whatever turns out to be in the deal, I do not think it would make him and the SNP support this deal. When it comes to trade, the SNP is isolationist and against the best interests of Scotland.

With the proposed free trade agreement with Australia potentially removing tariffs on all UK exports to Australia, does my right hon. Friend agree that that will save businesses across the United Kingdom millions of pounds—including in Buckinghamshire—support jobs across the nation, boost exports on products such as whisky, gin, cars and cheeses, and bring huge benefits to our agriculture sector?

I know how important my hon. Friend’s agriculture sector is in Buckingham, and I can say that the deal we are trying to secure will be very beneficial to exporters of whisky, biscuits, cars, cheese, apparel, ceramics and gin, including gin makers in his constituency such as Foxdenton, Bucks Brothers and Butlers Cross.

To support its agricultural industry, Australia has the highest rate of deforestation in the OECD and uses 71 hazardous substances that are currently banned in the UK. It is also one of the worst performers in tackling climate change, so how are the UK Government using the offer of zero quota and zero tariff access to persuade Australia to improve performance in this area?

We are the COP26 chair this year, and we look forward to full Australian participation. The Australian Government are absolutely committed to combating climate change. There may even be something on that in this agreement, which we are negotiating at the moment. In terms of where Australia is overall on our standards, it is worth bearing in mind that it does have high animal welfare standards. It is ranked five out of five by the World Organisation for Animal Health on its evaluation of the performance of veterinary services, and it is worth pointing out that Australian standards are high, but I repeat that there will be no compromise and no change as a result of this free trade agreement to our own food standards.

The Australian free trade agreement is a key step forward for both global Britain and the Indo-Pacific pivot, as well as a stepping stone towards a successful trans-Pacific partnership application. There are wide opportunities for Britain with a key member of the Commonwealth family, but does my right hon. Friend agree, first, that hormone-injected beef is illegal in this country, wherever it comes from? Secondly, does he agree that a combination of staggering the introduction of tariffs and targeted DEFRA assistance will ensure that upland farmers do not suffer in the alarmist way suggested by anti-free trade Opposition parties?

My hon. Friend is absolutely right. Hormone beef will remain illegal, because we will not be changing our import standards. I do not believe that this deal represents a fundamental threat to UK farmers, and it certainly does not compromise our high standards. As has already been pointed out, any changes for sensitive goods, such as beef and lamb, can be staged. A typical Australian free trade agreement has stages over 10, 12 or 15 years. He is right that there is an opportunity here: a springboard to CPTPP, which I know he understands well as our trade envoy to many parts of south-east Asia.

Farmers in my constituency produce first-class beef to the highest standards both environmentally and in terms of animal welfare, at considerable cost to the family farm. Does the Minister think it is fair to pitch these farmers against Australian farmers and their intensively produced imports, with lesser standards and great environmental impact?

I thank the hon. Lady for that question. In fact, I have met the Ulster Farmers Union twice in the past week to discuss these issues in particular. I met Diane Dodds, the Northern Ireland Economy Minister yesterday, and I am meeting Edwin Poots, the Northern Ireland Agriculture Minister, later today, so we are doing extensive outreach within Northern Ireland.

I would point out to the hon. Lady the huge opportunities for the Northern Irish agriculture sector. The very first beef exported to the United States last year came from Foyle Food Group in Northern Ireland. There are great opportunities for companies such as Moy Park as well in Northern Ireland to be able to export more. We are absolutely confident of being on the front foot, and ensuring that Northern Ireland also benefits from our free trade agreements, as it is written into the Northern Ireland protocol, and is able to sell more of its high quality meat into markets all around the world, including to the CPTPP 11.

Free trade has mutual economic benefits, for not just producers, as we have been discussing, but consumers, who get more choice. We must not lose sight of that. As the Minister said, the understanding is that the proposed free trade agreement with Australia would be a gateway to joining the CPTPP, which is a high-standards free trade agreement of 11 Pacific nations. Does he agree that doing so will mean lower tariffs for British exports to those markets, which will be an incredibly beneficial economic opportunity for British businesses?

My hon. Friend is absolutely right on the CPTPP. He is also right to focus on consumers, who are a vital part of our trade agenda. Under the CPTPP, 95% of tariffs between members will be removed. We already do £110 billion-worth of trade with the CPTPP. It has very liberal rules of origin, gold-standard data and digital rules, a small and medium-sized enterprise chapter, and very favourable conditions for business visas as well. It will be a great agreement for the UK, and a key stepping stone to get there is this free trade agreement with our great friends in Australia.