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July 7, 2022

Australia trade deal will not bring down UK food and drink prices, MPs warn

They also expressed “disappointment” that tariff-free Australian food will not be required to meet core UK food production standards.

By Andy Coyne

A report from a committee of UK members of Parliament has warned the country’s government against “overselling the benefits” of the trade deal it has agreed with Australia.

The UK’s free trade agreement (FTA) with Australia will see goods – including food and drink products – moving between the countries tariff-free but the cross-party International Trade Committee said that “while tariff reductions on processed food and drink may benefit consumers, they are unlikely to make a noticeable difference at supermarket checkouts”.

The committee is calling for a full assessment of the winners and losers across all economic sectors and nations of the UK from the deal.

Addressing UK farmers’ concerns about the impact of cheaper Australian imports coming into the country, the report said: “While the Government has sought to cushion negative impacts on the UK agriculture sector with phase-in arrangements, the committee notes farmers’ concerns that these protections are not adequate.”

The committee has also expressed “disappointment” that tariff-free Australian food will not be required to meet core UK food production standards, for example regarding pesticide use. It has called on the UK government to outline how it will monitor this and what it will do in response.

It also points out that the Government has “failed to secure protection” for the names of niche UK food and drink exports – geographical indications (GIs) – such as Melton Mowbray pork pies, Scotch whisky and Welsh lamb.

It remains legal in Australia to impersonate these products and the report suggests with such large concessions being given to Australian agricultural imports, this protection for UK exports “should have been an easy win”.

Angus Brendan MacNeil MP, chair of the committee, said: “The Government must level with the public – this trade deal will not have the transformative effects ministers would like to claim.

“The Government’s own impact assessment shows an increase in GDP of just 0.08% as a result of the deal and the balance of gains and losses varies between economic sectors and nations of the UK.”

“We have also found multiple examples where the Government’s flat-footed negotiating has led to significant concessions being given to the Australians without securing all possible benefits in return.

This is the second parliamentary committee to criticise the trade deal in a matter of weeks.

In late June, the House of Lords International Agreements Committee welcomed the deal but said: “Prioritising the speed of the negotiations may have come at the expense of using the UK’s leverage to negotiate better outcomes – for example, on geographical indications and the environment.”

The deal, agreed in December, was the first FTA signed by the UK unilaterally following Brexit, its departure from the European Union, in January 2020.

The House of Lords committee’s report is due to be debated in the upper chamber on Monday (11 July).

Just Food asked the UK’s Department for International Trade (DIT) for a response to the International Trade Committee’s report.

A spokesperson said: “Our landmark trade agreement with Australia will unlock GBP10.4bn (US$12.5bn) of additional bilateral trade, support economic growth in every part of the UK and deliver for the 15,300 businesses already exporting goods to Australia.

“We have always said that we will not compromise the UK’s high environmental, animal welfare or food safety standards, and the independent Trade & Agriculture Commission recently concluded that the deal does not undermine the UK’s robust domestic protections.”

On criticism that UK niche food and drink products are not being protected, the spokesperson said: “This fundamentally misunderstands the fact that Australia does not currently have a geographical indications scheme for agricultural products, foodstuffs or spirits. Should they introduce such a scheme we have agreed to review our agreement with Australia to ensure the UK’s finest products are protected.

“This is the strongest commitment that Australia has made towards setting up a GI scheme in any of its trade deals.”

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