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Complaints brew over AU-UK Trade Deal- June 2021

Negotiations for the Australia-UK free trade agreement is part of UK’s post-Brexit rush to conclude deals to make up for its loss of zero tariff access to the huge European market. UK ministers are expected to offer a trade deal that will gradually eliminate all tariffs and quotas over a 15-year schedule but is prompting alarm among UK farmers. A free trade deal is defined as one where goods & services can travel across borders set at market price without government intervention.

After four decades of EU membership that held tariffs and quotas on Australian produce, farm exports had slowed down to a tickle at 0.15% with all Australian beef exports going to the UK. Comparatively, mutton and lamb have made slightly bigger inroads to account for 14% of UK consumption, worth AUD$84m. However, the Financial Times report hat Australia’s top beef exporter expects to increase sales to the UK by 10 times should a deal go through. Liz Truss’s trade department argues that a free trade agreement could increase UK exports to Australia by up to £900m.

Environment secretary, George Eustice has concerns that large-scale Australian beef and lamb producers could undercut UK farmers through cheaper foreign imports. The prospects of such a deal may present a high level of risk to Northern Ireland and UK farmers to maintain tariff protection. Farmers tend to inherit their land and buildings tax free and enjoy protections from foreign competition in the form of tariffs and quotas. National Farmers’ Union argues that without protection, farmers may vacate the land and leave it un-farmed. Furthermore, such an agreement without tariffs may set a precedent of other economies to also seek a similar trade deal, further eliminating protection for UK producers.


The main benefit to UK consumers could be cheaper food, wine and the potential for business relations with Australia to improve, leading to further investment. The UK trade department reveals that a deal will boost GDP by £500m spread over the next 15 years, or around 0.025% of GDP.



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