Australia is one of the UK’s closest allies, of course. We share a head of state, the same language and very much the same values. Our people also enjoy deep and historic links of kinship and friendship, arguably unlike any other two nations.
A trade deal with Australia has been reached and is an enormous opportunity for the UK. We are Australia’s second-largest trading partner outside the Asia-Pacific and trade between our two countries was worth £18.8 billion in 2019. The deal will eliminate tariffs on all UK goods and will support jobs and businesses across the country. People under the age of 35 will also be able to travel and work in Australia more freely. Further details on the deal will be released shortly.
I very much understand people's concerns about the impact of the trade deal with Australia and its effect on food standards in particular. But I can assure that our food standards will be upheld and our farmers will not be undercut by this deal. Australia shares our belief in high standards in areas such as animal welfare and the environment.
British farmers will also be protected by a cap on tariff-free imports for 15 years through the use of tariff rate quotas and further safeguards. Agricultural producers are also being supported to increase exports overseas including in the Indo-Pacific. What’s more, the Trade and Agriculture Commission is there to provide entirely independent scrutiny of animal welfare in the deal ahead of its ratification.
A couple of months ago, I spoke in a debate in Parliament about the importance of British meat and dairy products and highlighted the concerns of many farmers that I have spoken with over recent months. Do feel free to read my speech here.
Global demand for meat is increasing rapidly. Meat consumption is projected to rise by 75 per cent by 2050 and free trade agreements create huge new export opportunities for British farmers, particularly in the Asia-Pacific region where demand is growing quickly. The deal with Australia is also a gateway to joining CPTPP (the Comprehensive and Progressive Agreement for Trans-Pacific Partnership) – a group of high-standards Pacific nations.
Maintaining high food standards has been a clear red line in the UK’s trade negotiations. Australia has one of the highest animal welfare standards in the world, not dissimilar to our own, and scoring five out of five by the World Organisation for Animal Health (OIE). The practices of castration of chickens and production of foie gras, for example, are banned in Australia on welfare grounds but continue to be permitted in the EU.
A number of farmers have raised concerns with me about hormone-fed beef. This is banned in the UK and will not be allowed to enter the UK market – this will not change under any free trade agreement. As I say, any compromising on our high food standards is a red line in our trade negotiations, so the UK will never allow its importation.
Australian export opportunities to the UK are likely to continue to be limited. We are more likely to see prime steak for restaurants, rather than cheap imports flooding supermarket shelves. If anything (though it is doubtful given the journey times, logistics and the Australian focus on their nearby rapidly growing Asian market) Australian imports of beef would displace current imports from the EU, rather than British produce. The EU currently accounts for most beef imports into the UK, with 237,928 tonnes imported last year. This is roughly 98 per cent of total beef imports into the UK in 2020.
Additionally, as I say, Australian beef and lamb is already committed to the rapidly growing Asia-Pacific markets. Around 75 per cent of Australian beef exports and 70 per cent of sheep meat are imported to Asia-Pacific markets, where in some markets the costs of beef production can be twice as high as in the UK. The prospect of substantive Australian imports of beef and lamb is very low.
Every part of the UK is set to benefit from this agreement. Scotland, for instance, exported £126 million worth of beverages to Australia in 2020 and the deal will help distillers by removing tariffs of up to 5 per cent on Scotch Whisky. Machinery and manufacturing goods account for 90 per cent of exports from Northern Ireland to Australia and the deal will remove tariffs and simplify customs procedures. The more than 450 businesses in Wales that exported to Australia last year will also benefit from the deal. Further provisions on digital, investment and market access for service professionals will benefit the UK's services sector. Additional details on the deal will be released shortly and Parliament will scrutinise the deal in the usual way alongside an impact assessment and explanatory memorandum.
I know that many other colleagues and I would, of course, not support a deal that would, in any way, undermine the UK’s high standards.