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Double Standards: The UK-Australian Free Trade agreement

Any agreement between governments led by the UK’s Boris Johnson and Australia’s Scott Morrison must be treated with a healthy dose of suspicion. A few minutes with the UK prime minister would lead you to believe that “Global Britain” is a meaningful term that covers loss and prestige. A session with Morrison will lead you to a brochure type of politics, policy implemented by glossy pamphlet and slogan.

The UK-Australia Free Trade signed last week has its predictable, chorusing champions. There are the free marketing dogmatists who assume that their dogma is based on fact and that such trade is a boon for all. “This is a historic agreement – it’s a true free-trade agreement. Everyone wins,” the admirably deluded Australian Trade Minister Dan Tehan stated.

At least one party seemed to win more than the other. The BBC’s global trade correspondent tartly remarked that, “The UK has given Australia pretty much everything it wanted in terms of access to the UK agricultural market.”

There are those who see this agreement merely as a front for other prejudices, among them showing that the UK can make independent agreements without the approval of doddery, fussy types in Europe overly keen on regulations. Financial journalist Matthew Lynn delighted in an understanding reached between two countries “stripped of all the supra-national baggage that the EU and its dwindling band of supporters insist are essential to ‘free trade’ – and for that every reason is vastly superior to Europe’s creaking, overly-complex single market.” The empire delusion, nostalgic and heavy, prevails in such thinking.

Then come the calculating types in Downing Street and beyond who hope that this deal with Australia becomes some sort of mighty springboard to greener pastures. When the deal was agreed upon in principle earlier this year, the UK government claimed it would ease its move into the Asia-Pacific, with the eventual hope of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Peter Jennings, a paid-up member of the Anglosphere and executive director of the partially US-funded Australian Strategic Policy Institute, sees the agreement as “an example of what can be done when two countries decide to put some priority and effort into cooperation.” Unblemished by the detail, he laments the fact those stubborn sorts in the European Union have made it just that much harder in free trade negotiations.

Those in 10 Downing Street suggest that the agreement would not only end tariffs on all UK exports to Australia but lead to £10.4 billion in additional trade. The more sombre types in the UK Office of Budgetary Responsibility predict a meagre return of 0.08% to the UK economy, but a loss of 4% in loss of free access to the EU.

All the swooning from the free trader advocates belies the critical faults in such arrangements. As a general rule, and one remarked upon by the co-authors of a RAND report from last year, “a free trade agreement (FTA), an instrument to eliminate tariffs, imposes costs and obstacles on two-way trade.”

The Australian Productivity Commission’s report on bilateral and regional trade agreements in November 2010 was also of the opinion that such “agreements can carry the risk of trade diversion.” This was certainly the case with the deeply flawed Australian-US FTA (AUSFTA) which, between 2005 and 2012, diverted US$53.1 billion of trade from other sources.

The authors of the APC report were also suspicious about evaluations arising from such trade deals: these tended to be based on political considerations rather than sound economic returns.

The potential costs to Britain have stirred representatives of 14 trade bodies and companies, who warned the then UK Trade Secretary Liz Truss that “the pace of these negotiations, particularly the free trade agreement with Australia, is too quick and denying the opportunity for appropriate scrutiny and consultation.”

British farmers remain justifiably worried. There are concerns that certain agricultural sectors will immediately feel the effect of Australian exports. As part of the agreement, Australian sheep meat will receive an immediate tariff-rate quota (TRQ) of 25,000 tonnes, rising to 75,000 tonnes over a series of instalments. The equivalent arrangement with beef covers an initial 35,000 tonnes, eventually rising to 110,000 tonnes. Both beef and sheep tariffs will be paired in a decade.

Earlier in the year, the NFU Livestock Chair Richard Findlay proved unequivocally hostile to the deal. Australian agriculture risked being a sinister Trojan horse, undermining British standards. “There is no comparison whatsoever between the robust production methods in this country and in Australia – they simply do not compare due to sheer size and scale.”

Australia, Findlay points out, was the world’s biggest beef exporter in 2019 (in terms of value) and second largest (behind Brazil) in terms of volume. Such scale meant fewer regulations, a lower “assurance burden” and significantly lower production costs.

With little by way of fraternal feeling between Commonwealth nations, the NFU livestock chair also pointed his finger at differing standards of animal welfare between the countries. The UK government was contemplating an arrangement with a country that exported “hundreds of thousands of live cattle and over a million sheep on long sea journeys to Asia and the Middle East every year.” The same UK government had also contemplated banning live exports for slaughter.

This point was picked up by Vicki Hird, the head of sustainable farming at Sustain, an agri-food group. Painting a picture of antipodean barbarity, Hird enumerated the darker aspects of Australian agricultural practices. Australia, for instance, permitted “the use of hormones and antibiotics to speed up growth as well as the removal of skin from live sheep [‘mulesing’, to prevent fly-strike], and they license almost double the number of highly hazardous pesticides as the UK.” And just to make things that bit grimmer, Australian farmers also used feedlots, battery cages and sow stalls.

As for the agreed protections for British farmers, NFU President Minette Batters found little comfort, suggesting they were neither extensive nor effectual. Dairy would be fully liberalised after six years, sugar after eight, and beef and lamb after 15. Phil Stocker of the National Sheep Association also noted the absence of “any resolution on how TRQs could be managed in a way to limit potential damage to our own domestic trade”.

A tone-deaf International Trade Secretary Anne-Marie Trevelyan sees little to bother the UK farming sector, or anybody else in Global Britain. For one thing, most Australian beef and sheep meat exports (somewhere in the order of 70%) made it to Asia-Pacific markets. “They’re closer for them and they get great prices.” She expected no “dramatic surge into UK markets” from Australian products but she was “very pleased to do things that will open up consumer choice.” That is a choice that promises to be very costly indeed.

 

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6 comments

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  1. Michael Taylor

    Any agreement between governments led by the UK’s Boris Johnson and Australia’s Scott Morrison must be treated with a healthy dose of suspicion.

    Boris is redundant on that matter: I treat everything Scott Morrison says or does with a healthy dose of suspicion.

  2. paul walter

    Amused me (and a sure indication of duplicity) the thing was not announced till a “putting out the garbage” moment when everyone’s attention was sidetracked else where.

    It appears, at least a bit, about wedging workers and unions again..

    Having tossed the French and Chinese, this deal smacks of TINA,

  3. Phil Pryor

    More political farce and self deception, as Scott Whore-Harlot and Boris Dreary-Dunce romance the grip, the fist, the oscillation of political fantasy. The costs, unreliabilities, overheads, uncertainties, old resentments, snobberies (U K), versus slobberies (Australia), will rise and surge as some subsection of ruthless turds schemes up a little win. The rotten old empire of murder, slavery, theft, occupation, supremacist outrage and depravity has GONE, and any ongoing scheme of mutual loving benefit is illusion, stupidity, ephemoral. Who wants a cheap Morris car or a blizzardy old Pye T V? Morrison is barely literate and house trained and functional professionally, while Boris the Bonker/Sipper/Inserter/Liar should be chained to the kennel for mere barking warnings…Anyone for a load of crook and brummy old rubbish??

  4. Andrew J. Smith

    The Anglosphere’s radical right libertarian imported Tea Party moment, Brexit and Global Britain, won by media promoted populist collective narcissism and anti-immigrant sympathies, applied to ageing electorates; backgrounded by decades of dog whistling softening up the electorate, for sub-optimal policy support.

    While anyone can see that the trade advantage for the UK with Australia is almost zero in the long term (while removing itself from a massive EU customs zone/trade bloc next door), post Brexit was fascinating in how many (formerly detached/complacent) British voters, both remain and leave, were suddenly awoken by Brexit.

    This was exemplified by informing (any random) Australian that the UK would be making an agreement based upon Australia ceding it’s own trade ‘sovereignty’ in our region to accommodate the British…… simply uninformed, ignorant, bonkers and reeking of superiority, but too many Anglosphere protagonists in Australia are happy to promote against the interest of future generations (ditto climate/fossil fuels, attacking universities, NGOs and unions etc.).

    Since then we have been shafted by the US and domestic issues, in being encouraged to upset China, disengaging, losing markets etc. following Trump admin policy, then watching as the US slips in to fill the trade gap…… then demanding we also slot into potential US military adventures with AUSUK……

    It’s more about paranoid old top 0.1% of WASPs in the US desperate to preserve their status and US hegemony globally (as it is in decline), now co-opting the same in the UK and Australia for support, but is neither in the long term interest of UK nor Australia?

    How many former or those related to the LNP, NewsCorp, ASPI or IPA are acting as foreign agents against Australia’s own interests including Howard, Downer, Abbott, Morrison, Wilson, et al.?

  5. wam

    UK to eliminate all tariffs on New Zealand exports, with over 97% being removed the day the FTA comes into force. How does Adhern compare with scummo? The kiwis’ FTA with china was superior, especially with limits per sector on chinese workers, to that of the rabbitt’s robb’s speed signing. Although robb did get a $880000 part time job, starting the day before his parliamentary pay stopped, for his efforts. Who did the UKFTA and what did he get?? ps can’t help yourself, phil those words are demeaning, as both are derogatory terms for: “a person, in particular a woman, who engages in sexual activity for payment.”
    A male prostitute:
    a person who offers his or her talent or work for unworthy purposes(collins)
    confusing to this little ex-loonie, but a male prostitute seems to fit your context??

  6. Phil Pryor

    Well Wam, what else could such as Laws and Jones be, in cash for comment, payola? And if one scribbles or yabbers for Murdoch..?

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