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May 21, 2021

UK ‘to offer Australia tariff-free trade deal’

The UK government is reportedly set to make an offer to Australia on a trade deal that will phase out tariffs and quotas.

Media reports in the UK published today (21 May) say the plan is for tariffs and quotas to be wound down over a 15-year period.

Reports earlier this week suggested the UK government had been split over the kind of deal to be put forward to Australia. UK broadcaster the BBC, quoting sources in Downing Street, said today the Cabinet had agreed on a position.

In April, the UK government announced London and Canberra had “reached consensus on the vast majority of elements of a comprehensive free trade agreement”. At the time, Truss said the two countries would “spend the next few weeks ironing out details and resolving outstanding issues, with a view to reaching a deal by June”.

UK farmers, particularly those in livestock production, have long opposed free access to imports from Australia. At present, Australia meat exporters face tariffs on exports to the UK.

Earlier this week, UK farmers’ body The National Farmers’ Union (NFU) called on the country’s government to “stand up for UK farmers in all of its negotiations”.

NFU president Minette Batters said: “The British government faces a choice. It must recognise that opening up zero-tariff trade on all imports of products such as beef and lamb means British farming, working to its current high standards, will struggle to compete.

“Negotiators must also be mindful of the cumulative impact of our free trade agreements, which the government has said will be concluded in a matter of weeks. They will be the first in a series of deals that will undoubtedly increase market access into the UK. The government must assess how the impact of these concessions combined across multiple trading partners will impact on domestic producers and the rural economy.”

According to data published by the Australian government, two-way goods and services trade between Australia and the UK was valued at AUD36.7bn (US$28.56bn) in the 2019/20 year.

Australia has stated it wants a free-trade agreement between Canberra and London to “improve market access for Australian agricultural and industrial products; reduce barriers to trade and costs through modern customs, rules of origin and trade facilitation procedures; [and] include mechanisms that address non-tariff barriers to trade”.

A statement on the website Australia’s Department of Foreign Affairs and Trade, setting out the benefits Canberra sees from a possible deal, reads: “Australian agricultural exports to the UK have been relatively low since the UK joined the EU, due to the high tariffs and other trade barriers the UK imposed as a member of the EU. While it is unlikely we will return to pre-EU volumes of agricultural trade with the UK, as Australian agricultural exporters have since diverted their trade to other markets especially in Asia, the opening of more choices is important for our primary producers, particularly for our post-Covid economic recovery.”

In a statement issued this afternoon, UK industry body The British Meat Processors Association (BMPA) said “remonstrations” this week from Canberra that Australia “won’t be sending huge volumes of meat to the UK might sound reassuring” but insisted “a small volume of imported meat can have a disproportionately big effect on British companies”.

Peter Hardwick, trade policy advisor at the BMPA, said: “As an example, a 20-foot container load of beef with 17,000 kilogrammes, with a full range of meat cuts, might represent the meat from just 60 animals. A similar shipment containing only [high value] boneless sirloins would have come from over 1000 animals. If it were fillet steaks it could be three times that number. It’s not the amount of meat by weight that matters. It is the amount of high-end, high-value cuts that will have a disproportional impact on the marketplace.”

UK newspaper The Guardian today reported comments from Australia’s trade minister, Dan Tehan, who was quoted as saying he was confident concerned UK farmers could be placated.

“What I would say to UK farmers is that the Australian agricultural industry and the UK can work together, I think, to enhance agricultural production in the UK and enhance agricultural production here in Australia,” Tehan was quoted as saying.

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