Truss wins tussle for tariff-free Australia deal but 15-year transition gives farmers time

Fri 21 May 2021
Posted by: William Barns-Graham
Trade News

uk australia

The UK government is expected to offer Australia a tariff-free trade deal following a week-long debate over its merits and potential impact on British agriculture, according to reports in the national media today (21 May).

The deal will include a 15-year transition period upon agreement in which import duties and quotas will be phased out for trade between the two countries, the Daily Mail reports.

Week-long debate

A week of media briefings for and against the agreement was launched by an article by the president of the National Farmers’ Union on the Mail on Sunday.

British farmers have claimed they will be pushed out of business by cheaper meat imported from Australia – an argument reportedly backed by cabinet ministers George Eustice and Michael Gove.

The Prime Minister now hopes to have settled the debate having backed Trade Secretary Liz Truss, who has argued that such fears were misplaced due to the distance between the UK and Australia.

Both sides would have aired their views at a cabinet meeting yesterday.

Phased introduction

However, agricultural firms will be told that the no-quota, no-tariff deal will be phased in over 15 years if the UK’s offer is accepted, giving the sector time to adjust.

The details of the exact length of this transition period and how long it will take for tariffs to be removed for different product types is still to be negotiated. 

A Downing Street spokesman said any agreement would include “protections for our agriculture industry and won’t undercut UK farmers” but would not be drawn on what these would entail.

Standards

While the debate may have been settled in cabinet, the opposition Labour Party is likely to continue scrutinising the details of the agreement.

Speaking on Times Radio, shadow international trade secretary Emily Thornberry said: “We have good animal welfare standards, and we don’t want that undermined by cheap imports from countries that don’t have the same standards as we do.”

Negotiations

According to the Sun, Australia was pushing for tariffs and quotas to be removed for trade into the UK in five years’ time.

However, the government is reportedly confident that Australia will accept the 15-year deadline it has offered today.

Strategy

The PM’s trade strategy committee, including the chancellor and the foreign and business secretaries, is understood to have agreed to include protections to maintain high standards in farming, but concluded that tariff barriers should be dropped.

The Guardian also reports that the Australian agreement could form a template for future negotiations with the much larger economy of the United States, which would be likely to press for similar access to the UK’s agriculture markets.