What does the UK’s pivot to the Asia-Pacific mean for Welsh farming?
Writing in the Farmers Guardian, Ben Lake says the UK-Australia trade deal has given Welsh farmers a ‘harsh lesson’ about Westminster’s trade priorities
This article was published on Farmers Guardian website on Wednesday 21 July 2021
The UK-Australian agreement in principle offered Wales a harsh lesson about Westminster’s priorities for trade, which pose a serious long-term challenge to Welsh farming.
The Welsh Affairs Committee session on the UK-Australia trade deal last week, attended by NFU Wales and the FUW alongside both UK and Australian trade experts, offered a troubling insight into the parlous state of UK trade negotiations. Whether it be farming unions learning about the deal from Australian news outlets, or Westminster MPs parroting the lines of the Australian Government, it was clear that Australia had the upper hand in negotiations.
But why? The deal is only expected to increase UK GDP over fifteen years by 0.02% of GDP. It seemed that in the rush to secure a headline before the G7 summit and CPTPP membership, Liz Truss not only removed any long-term protections for our farmers but kicked the door down for cheaper Australian imports to enter our market.
The UK Government has countered industry concerns by citing the phased introduction of measures, overall distance, the potential that Australian imports will displace European ones, and finally membership of CPTPP.
Yet the agreement in principle enables Australia to immediately increase lamb exports to the UK by 250 percent and increase beef exports 10-fold. Although imports may start from a low base, as a former Australian trade negotiator reminded the Welsh Affairs Committee last Thursday, Australian exports of beef to the US market increased by 627% in the last twenty years, and now dominate almost a third of the US market by value.
Distance is also not a problem for Australia which daily exports across the Pacific and which used on average 98 percent of its EU quota between 2015 and 2017, reaching the European market with ease. The Australian trade logic is to open market access globally, regardless of present demand, and then trade in volume when, and where, it can get the highest profit. It is difficult to find any sign of a coherent strategy from the UK’s trade negotiations to date.
This brings us to CPTPP. While efforts to increase Welsh exports sustainably and responsibly overseas is to be welcomed, it is hard to dismiss the argument that the promise of CPTPP membership is a case of ‘jam tomorrow’ for Welsh farmers.
The logic, we were told, was for the UK to join the CPTPP and make the most of South Asia and the Pacific region’s economic development. Yet what does this mean practically for our agricultural industry?
We have first-hand experience exporting to new markets such as Dubai, which has taught us that breaking into new markets against established competition, while possible, is difficult. Successive trade missions and food events, while important in raising the profile of our fantastic food and drink sector, have not yet delivered successively high returns.
It takes time to establish new markets; and given that the UK-Australia trade deal will enhance Australian access to the UK market before the UK even concludes negotiations to join CPTPP, I would argue the Government has negotiated a head start for Australian farmers.
The pivot to the Asia-Pacific cannot be at the expense of our farmers. To protect Wales from the aftershocks of the UK’s pivot, we need to secure a stronger front at home and better representation for Welsh farmers in UK negotiations abroad. Only by doing so can we protect existing trade, and ensure a level-playing field that values high value, high welfare Welsh products at home and abroad.