- [Relevant documents: e-petition 554372, Establish free movement & trade agreements with Canada, Australia & New Zealand; First Report of the International Trade Committee, UK trade negotiations: Scrutiny of Agreement with Australia, HC 444; Second Report of the International Trade Committee, UK trade negotiations: Agreement with Australia, HC 117; Third Report of the International Trade Committee, UK trade negotiations: Agreement with New Zealand, HC 78; Fourth Report of the International Trade Committee, UK trade negotiations: Parliamentary scrutiny of free trade agreements, HC 815; and the First Special Report of the International Trade Committee, UK trade negotiations: Scrutiny of Agreement with Australia and Agreement with Australia: Government Response to the Committee’s First and Second Reports, HC 704.]
- 4:12 pm
- I beg to move,That this House has considered the Australia and New Zealand Trade deals.The Australia and New Zealand free trade agreements are deals that will deliver for people, businesses and our economy. These are our first “from scratch” free trade agreements since we left the European Union, and they are deals of which this country can be proud. They demonstrate our ambition as an independent trading nation. They secure commitments that, in places, go above and beyond international best practice, and put us at the forefront of international trade policy.I was here in June 2018 when we were finalising the call for input, and I was here again as the Minister in June 2020 when the negotiations were launched. It is great to be back at the Department to see the deal having been done, and I look forward to many similar deals as the Minister responsible for trade policy. I am delighted that the Leader of the House, who was recently in this role, was sitting next to me earlier and discussing the important part played by both herself and the present Minister of State, Foreign, Commonwealth and Development Office, my right hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), over the past year. I should also pay tribute to my right hon. Friend the Member for South West Norfolk (Elizabeth Truss), formerly the Prime Minister, and the International Trade Secretary throughout a large part of this process.We negotiated these ambitious deals with like-minded partners apace but with diligence, going further and faster than, for example, the European Union has been able to. The EU has yet to get a deal with Australia over the line, and only recently concluded talks with New Zealand, after four years. The deals represent a deepening of our relationship with close allies, fellow members of the Five Eyes intelligence partnership and like-minded democracies which share our beliefs in fairness, free enterprise, high standards and the rule of law.
- The Minister will be aware that the Australia deal in particular has created quite a lot of concern among Britain’s farmers. For example, Jilly Greed of the Suckler Beef Producers Association has said:“This is an absolute betrayal…this is Christmas all over for Australia”.The former chief economist of the National Farmers Union has said:“Agriculture will bear a disproportionate cost. So desperate are the Government to do deals, they are preparing to slim down agriculture”.How would the Minister respond to those allegations?
- I am delighted to respond, because I have had extensive interaction with all the five nations’ NFUs during this process. We have delivered a deal that phases in the changes. The right hon. Gentleman might reference the fact that the trade deal we have with the European Union, which he supported, gives the EU comprehensive access from day one. This deal phases in access for Australia and New Zealand for a period of up to 15, and in some cases 20, years. I think that is worth consideration, as is the extensive interaction we have had with the NFU and with farmers. I have met MPs and their constituency farmers at some length and we will continue to interact with the NFU and the NFUs in all the nations to ensure that we are in full listening mode when it comes to Britain’s essential farming community.
- Further to the intervention from the right hon. Member for Leeds Central (Hilary Benn), I have here a copy of “Y Tir”, the monthly publication of the Farmers Union of Wales, which states:“There will always be winners and losers when it comes to negotiating liberalised free trade agreements, and it is clear from the UK Government’s impact assessments that UK agriculture will be one of the losers if these deals are ratified”.Does the Minister acknowledge the widespread concern among our agricultural communities that the British Government are selling them down the river?
- I disagree with that. I am just checking my records and I have had extensive interactions with representatives of NFU Cymru during the negotiation process. I met them on 19 May 2021—I met the Farmers Union of Wales on 19 May as well—and on 26 May, 16 June and 13 September. It was important for us to get the confidence of the farming community in Wales and I also did various Zoom calls at the time—this was during one of the lockdowns—with MPs and their constituent farmers. The protections we have in the deal are very considerable. For example, the tariff rate quotas carry on for 10 years in some cases, and there are product-specific measures to protect sensitive agriculture produce from years 10 to 15 as well as bilateral safeguard mechanisms. There are a lot of protections there.
- Will the Minister give way?
- I will give way in just a moment, but perhaps the hon. Gentleman will explain what his position might be and whether his party will ever support a single trade deal that has been proposed either by the European Union or by the UK Government. Will he tell us that?
- It is not often that I get the opportunity to do so, and I am happy to say that when there is a good trade deal for Welsh farmers, I will be very happy to support it. Further to the Minister’s point about NFU Cymru, that union and the Farmers Union of Wales have both expressed concerns about the cumulative impact of the various trade deals. Has that featured in any assessments the Department has made, and if so, can he share with us what he makes of Welsh farmers’ concerns about this cumulative impact?
- I welcome the hon. Gentleman’s support for trade deals and I look forward to him voting for one of them one day. In terms of the impact on Welsh farmers, I must point out some of the market access that we have recently gained—for example, Welsh lamb is now able to enter the US market for the first time in many decades due to the United States removing the small ruminants rule, and I was in Taiwan only last week are trying to negotiate access for Welsh lamb to the Taiwan market. When it comes to accumulation, he ought to think about the fact that there is tariff-free, quota-free access for the European Union for the UK at the moment. That has been the case from day one of the trade and co-operation agreement.
- Surely one of the points we ought to be considering is the fact that about a third of the beef consumed in the UK is already imported. Some of it is imported from Brazil, where there are concerns about deforestation, and a big amount is imported from the EU, primarily from Ireland. We might not see fresh competition from Australian beef, but import substitution might be part of the equation.
- The right hon. Gentleman makes a strong point. We are all in favour of competition, and of consumers being able to make their choice, but I would add that meat exports from Australia and New Zealand are much more likely to go to the far eastern markets. A big percentage of the exports from Australia and New Zealand currently go to those far eastern markets that, frankly, we would like to access by joining the CPTPP trade agreement. We want to have a piece of that action. He is right that it is more likely that exports from Australia and New Zealand will displace those from the EU, giving choice to consumers.These are more than just deals with like-minded and long-standing partners; they are part of the UK’s new strategic approach.
- Before we entered the common market, the Australia-New Zealand agricultural juggernaut centred on this country for its trade. As my right hon. Friend said, that trade is now going to 100 or more countries, so it has spread. Our farmers survived and did not complain before the common market, and that will continue.
- My hon. Friend is an expert on the connections between the United Kingdom and the continent of Australasia. He makes a good point about restoring trading connections that existed prior to this country’s membership of the European Union. We should treat these two trade deals as an opportunity not a threat, which is a point he makes well.These deals are a key part of our Indo-Pacific tilt. The Indo-Pacific region matters to the UK, as it is critical to our economy, our security and our global ambition to support open societies. Rapid economic growth in the Indo-Pacific region is shifting the world’s centre of economic gravity eastwards. In the first two decades of this century, the Indo-Pacific region accounted for 50% of global economic growth in real terms; by 2050 that is expected to be 56%. The Indo-Pacific is home to half the world’s people, and there are significant economic opportunities for the UK in trading with the region. These deals are just the start.These two agreements are a significant step towards our accession to the CPTPP, membership of which will further open up 11 Pacific markets across four continents worth £9 trillion of GDP in 2021. Joining the CPTPP will put the UK at the heart of a dynamic group of growing nations. We negotiate deals that are tailored to the UK’s strengths, such as our world-class service industries that employ 82% of our workforce and account for 80% of our economy. These deals will unlock new markets, create jobs and drive the growth that the UK, like many other countries, needs right now. They will provide real outcomes for real businesses.
- What does the Minister make of the International Trade Committee’s finding that more export opportunities and greater safeguards for the food industry could have been negotiated? How are the Government implementing the lessons learned for future deals?
- I thank the International Trade Committee for its various reports on both deals, and I look forward to engaging with its Chair, the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), and indeed the whole Committee.It can be said of any negotiated deal that something might have been better, as that is an inevitable consequence of negotiation. There is a bit of give and take. The safeguards for UK agriculture build in a very considerable length of time, of 15 or, in some cases, 20 years, for people to adjust. I contrast that with the European Union deal—the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) voted to have no deal with the European Union—which gave instant access.Today, I will explain to the House how these important deals will help firms in every part of the country to flourish and grow. First, these agreements will remove 100% of tariffs on all goods, most of which will come into effect as soon as the agreements are in force—that is particularly with reference to UK exports. They will reduce red tape on British goods sold to Australian and New Zealand markets, making our exports even more competitive. Our automotive sector is among the many UK industries that will reap the rewards. For example, McLaren says that these tariff reductions“will support and facilitate customer and network growth across Australia in the coming years.”Nissan says that removing the 5% duty on car exports will help further exports to Australian customers of the Leaf, Qashqai and Juke cars it makes at its Sunderland plant. The removal of tariffs of up to 10% on car parts and on some vehicles sold to New Zealand is good news for other vehicle manufacturers across the UK.A range of other industries will also benefit. For example, Nairn’s, the Edinburgh-based oatcake manufacturer, says savings from removing 5% tariffs under our New Zealand deal will help offset the increased costs that have affected businesses following covid-19 and Russia’s invasion of Ukraine. The Food and Drink Federation believes the removal of a range of tariffs will help to give UK businesses significant growth opportunities and make them more competitive in the New Zealand market.