U.K. Farmers Fear Australia Trade Deal Leaves Them Unprotected

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The U.K.’s National Farmers Union warned that Britain’s provisional trade agreement with Australia doesn’t do enough to protect local farms, despite extra market access being phased in over time.

“It’s not clear at all that the safeguards that have been announced will have any effect,” NFU President Minette Batters said in an e-mailed statement, commenting on the quotas such as an initial 35,000-ton cap on beef imports from Australia. “These are enormous volumes.”

Extra competition for British farmers has been the most contentious feature of the U.K.’s post-Brexit trade deal with Australia, a symbolic prize for Prime Minister Boris Johnson as he seeks to show upsides of Britain’s split from the European Union. The U.K. and Australia have announced an agreement in principle on a deal -- which is expected to boost the size of Britain’s economy by 0.02% over 15 years -- but negotiations are ongoing.

The NFU has expressed concern at being undercut by cheaper Australian meat produced on larger-scale farms that use products and production methods banned in Britain. To mitigate the impact for domestic producers, the U.K.-Australia provisional agreement said limits would be placed on agricultural imports for several years.

Defending the safeguards, International Trade Secretary Liz Truss said in Parliament last week that the 35,000-ton initial beef quota amounts to “only” 15% of total U.K. beef imports from the EU. The U.K.’s Department for International Trade has also said that Asia is a more important market for Australian meat exports, and any imports of Australian meat to Britain would likely displace EU imports.

Yet the NFU contested the adequacy of the protections, saying that even if EU imports are displaced it would still put a downward pressure on domestic prices.

“It’s clearly additional access to what the EU already has,” Nick von Westenholz, director of trade and business strategy for the NFU, said on a call with reporters. “15% additional access is quite significant.”

The market access given to Australian farmers also weakens Britain’s hand in trade negotiations with countries such as New Zealand and the U.S., von Westenholz said. This is because it will lower prices in the U.K. market, meaning trade partners will demand even more market access to make an accord worthwhile, he said.

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