Molly Pollock takes a look at what we have learnt so far about Johnson’s fag-packet Australian ‘trade deal’. Johnson doesn’t do detail but the eventual actual negotiators will need to and parliament will not get sight of the details until it is all signed, sealed and unalterable.
So we now have what is being spun as a trade deal, albeit it is little more than an agreement to discuss a possible deal, with Australia, announced with great acclaim as the first fully post-Brexit trade deal at a photo opportunity with the Australian Prime Minister Scott Morrison. Despite the deal (with the pact apparently agreed over dinner, making it sound like desperate back-of-fag-packet stuff) being announced in the Downing Street rose garden, the implications of the deal will be far from a bed of roses for farmers in the UK.
The ‘deal’, whose details are still unclear (not surprising as it’s little more than a few suggestions, perhaps even wine-induced), involved no consultation with the devolved parliaments. Indeed Ivan McKee, the Scottish Government’s Minister for Trade, Innovation and Public Finance, Tweeted earlier today:
Very interested to read so much well-informed coverage of the Australia FTA – I was due to be briefed by the UK Gov along with Ministers from Wales and NI this morning, but our call has been put back until much later because we were told “not enough of the deal is nailed down”
So definitely not a done deal, nor an oven-ready deal, in fact not even a deal.
Incidentally, Parliamentarians can’t see what the government is signing us up to nor will they be allowed proper scrutiny until after the ‘deal’ is agreed.
Carbon footprint reduction
Johnson arrived at the Cornwall G7 summit, at which climate change was a major topic, in a private jet. Apparently the runway at Newquay airport was lengthened for this summit at a cost of £8m. Standing on the aircraft’s steps his mantra was build back greener, somewhat ironic given he’s now crowing about a ‘deal’ that involves transporting goods from the other side of the world to the UK, both from Australia and ultimately from other far-flung countries.
A new dawn for UK
The Guardian in an article provided some sketchy information on the so-called deal Johnson described as “historic” and a “new dawn”. Over 15 years tariffs will be eliminated on exports to each other’s countries. This apparently will “reduce the cost of Scotch whisky and British cars in Australia and the price of Australian wine to the British consumer.” British cars? Do we have any?
So a sop for distillers and car manufacturers in the Midlands and North of England to keep the former red wall folk voting Tory. Although it would certainly be more environmentally friendly if Aussies bought their cars from Japan, a much nearer neighbour, so limiting polluting miles.
Meanwhile in an article in the Mirror, Scott Morrison is reported as saying said that the trade agreement [not deal] is a “pathway” for the UK to join other partnerships across the world. Sad that the UK is desperately looking for pathways to join trade partnerships on the other side of the world whilst having retreated from the one on our doorstep.
The Australian government requires work-holiday visa visitors to work for three months or 88 days of regional specified work in an eligible industry such as farming, fishing, mining or construction. However, under the trade ‘deal’ British visitors under the age of 35 might, repeat might, be able to extend their work holiday visas without having to dirty their hands on Australian farms or building sites.
British farmers, they are assured, will be protected for 15 years by a cap on tariff-free imports by using tariff rate quotas and other safeguards, but no details were provided. So farmers can take that with the same large dose of salt taken with other UK government promises.
Wine and other stuff
But if you think the ‘deal’ looks rather threadbare cheer up. Wine, like Jacob’s Creek and Hardys, could be cheaper by about 7p per bottle (providing the saving is passed on to the customer). And swimwear will be cheaper. Though you may be unable to reach, or afford, Europe’s sun-drenched beaches to wear your new bikini.
Oh, and biscuits will be cheaper too. And maybe sweets.
The removal of these tariffs would, according to Downing Street, “save households up to £34million a year”. With an estimated 27.8 million households in the UK, this predicted saving per household is worth around £1.22 per year. So we can all have a splurge once the pandemic has retreated into the background.
Reactions to the deal have been muted, to hostile, to head-scratching.
The much-lauded ‘deal’ would boost GDP by £500m over 15 yrs, accounting for 0.025% of GDP, whilst we are embarking on a trade war, over Northern Ireland border issues, with our former EU friends and main trading partner that accounted for 51.6% of UK imports and 53% of exports. The ‘deal’ also has an important feature – it lets in agricultural products which not only will undermine quality home produce but, as Australian produce doesn’t meet EU standards, it will make rejoining the Single Market increasingly difficult as UK food standards diverge ever more from those of the EU.
As someone on Twitter put it, it’s like someone on £25,000 a year making a huge series of concessions and compromises for a £5 payrise.
Perhaps not unsurprisingly given its timing (hard on the heels of the fairly calamitous G7) and lack of detail, the ‘deal’ has been described as a PR stunt of no economic value, but of significant long term danger for our agriculture sector. A UK government so desperate for a trade deal, any trade deal, has effectively sketched out one of very limited economic benefit to the UK, one which is highly likely to destroy British sheep and beef farming, along with the livelihoods of those involved. Whilst Australia gets exactly what it wants from the UK ‘deal’ – flooding us with its cheap agricultural products – the UK receives next to nothing in return. Indeed this would appear to be the start of the plundering of a UK desperate for trade deals, the days of ‘win-win’ deals now in the past. Other countries, such as India, scenting deals to their advantage are already lining up and others will be along too.
In an article in the Mirror, William Bain, Head of Trade Policy at the British Chambers of Commerce, pointed out that while an agreement was welcome, “trade with Australia represents only around 1.2% of the UK’s total, so whilst a deal will have welcome benefits it will not offset the ongoing issues with trade to the European Union.”
People are questioning how food from the other side of the world can be cheaper given transportation costs and the subsequent environmental damage. Cheap food indicates cost cutting, lower standards, higher health risks and lower animal welfare standards. Cheap food at the expense of quality is not considered by many to be a great deal, especially given its impact on home production.
Australians are voicing disbelief at the UK acceptance of the trade ‘deal’. For the UK the only benefit is cheaper food coming at the expense of UK farms losing business. Rather than the ‘deal’ opening up new, foreign markets for UK businesses, this ‘deal’ appears to be opening up UK markets to foreign competition which will severely damage UK livelihoods.
The Australian ‘deal’ also indicates to the US that the UK is more than willing to roll over to accommodate lower standards, GM crops, hormone injected meat, and chlorinated chicken. It also indicates the UK has no problem accepting the secret courts that will force the UK government to pay compensation should any UK laws affect the profits of an American company.
So for around 50p per head per year we are ditching the high quality food and animal welfare standards that we have become accustomed to as part of the EU. The British who were traditionally so fond of animals now seem happy to throw them to the wolves of profit. Whilst farmers in Australia rub their hands in glee.