UK-Australia free trade deal risks being held ‘hostage’ by farmers

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Britain should not allow the Australia-UK free trade agreement to be held “hostage” by the country’s farming sector and should focus on ratifying the deal this year, a leading trade group has warned.

The Australian British Chamber of Commerce published a report this week that said the UK’s first post-Brexit trade deal would remove more than A$9bn (£5bn) of tariffs and boost access to workers and capital between both countries.

But British farmers have objected that Australia could flood the UK market with cheap beef and lamb and damage the livelihoods of livestock producers.

“The danger we face is that agriculture, which is an important but small part of the free trade agreement, holds other parts of the agreement hostage. There is a much broader horizon,” David McCredie, the organisation’s chief executive, told the Financial Times.

“It’s important for the [UK] government, having trumpeted that this is the first post-Brexit trade deal, to live up to the high benchmark they’ve set,” he added.

The free trade deal, which was agreed in principle last year, should be ratified in the final three months of this year, but could drag into 2023 if held up in the British parliament, he added.

The wide-ranging agreement will cut tariffs on everything from whisky to electric vehicles made in Sunderland being exported to Australia. Boris Johnson, the British prime minister, posed with a packet of Australian Tim Tam chocolate biscuits last year to highlight the benefits for UK consumers.

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McCredie said there was a risk that the deal, which could stimulate a post-pandemic economic recovery for both countries, might be weighed down by overly pessimistic views of its impact on the British industry.

“Every day we wait means more tariffs,” he added.

The UK is Australia’s fifth-largest trading partner for goods, according to Australia’s Department of Foreign Affairs and Trade. The agreement could create opportunities for companies that have been hit by Chinese tariffs as part of rising geopolitical tensions between Beijing and Canberra.

Agricultural trade has remained very low between the UK and Australia since Britain joined the EU because of high tariffs and trade barriers. The Australian government has argued that it is unlikely to return to pre-EU membership levels because of the strength of its Asian trade relationships.

Most of the benefit will be for large service industries in the UK and Australia, with migration and capital investment opened up.

“It is not just window dressing, it has real teeth,” said McCredie.

The Australian British Chamber of Commerce represents the interests of 25,000 businesses active in both countries.

The UK’s Department for International Trade declined to comment.

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