Australia Free Trade Agreement

Lord McNicol of West Kilbride Excerpts

Monday 11th July 2022 Lords Chamber

[Lord McNicol of West Kilbride (Lab)]

My Lords, like nearly all other speakers, I congratulate my noble friend Lady Hayter of Kentish Town and pay tribute to her and her committee on the detailed and balanced report that has been debated this afternoon. I share the overall analysis from the noble Baroness, Lady McIntosh of Pickering, that it is cautious in nature. I think that is fair.

After leaving the European Union it is of course vital that Britain seeks free trade agreements across the world, but there are standards that these agreements must be held to. The deals that we negotiate must benefit UK interests, UK workers and UK businesses. As we have heard, the UK had not negotiated a full free trade agreement from scratch since 1973. I think the noble Lord, Lord Purvis, was very young then.

[Lord Purvis of Tweed (LD)]

I was not born.

[Lord McNicol of West Kilbride (Lab)]

I was four. Negotiating from scratch in itself should not have been an issue, but analysing in detail the Australian agreement raises very real concerns about what has been negotiated and what has not. Parliament has been virtually neutered in the whole process. The Australian agreement was signed in December 2021 and the New Zealand agreement in March 2022. We are now in July with just over one week before Parliament rises. Yes, it has been examined by the International Agreements Committee and the International Trade Committee in the other place but it will then be laid before Parliament similar to any other statutory instrument.

I wonder, as many other noble Lords have this afternoon, whether better parliamentary scrutiny would have led to a better, fairer, greener and more equitable agreement. There is a paradox at the heart of the Australian deal—the Government’s own impact assessment estimates that our farming, forestry and fishing sectors will take a £94 million hit and our semi-processed food industry a £225 million hit. Yet, again by the Government’s own predictions, overall trade will increase by less than 0.1% of GDP by 2035, while there is fear of real damage to some of the UK’s most important sectors.

As many other noble Lords have this afternoon, I worry that the prize of the deal, the prize of the headline, the prize of being first was more important to the Government than the detail of the agreement itself. As my colleague Nick Thomas-Symonds MP said in the Commons:

“Other countries, in future negotiations, will look at what was conceded to the Australian negotiators and take it as a starting point.”—[Official Report, Commons, 5/1/22; col. 67.]


UK exports to Australia as a result of this deal are supposed to rise by 53%, but I see no great basis for that optimism. Few trade deals have ever had that kind of impact, and certainly not those between two countries where there is already a good trading relationship with historically low tariffs. The 53% is also somewhat higher than the original estimate. Can the Minister explain this leap in optimism between the original estimate and the secondary estimates?

As we have heard from the noble Duke, the Duke of Montrose, the noble Baroness, Lady McIntosh of Pickering, and the noble Lord, Lord Liddle, the labour, environment and animal welfare chapters are pretty weak and do not necessarily focus on UK interests. Would the Minister care to elaborate on any specific improvements negotiated which will bring a positive benefit to our labour, environmental or animal welfare standards?

Minette Batters, the NFU president, said:

“The government needs to level with farmers about the commercial reality of this and ditch the soundbites that lost any meaning a long time ago.”


She continued:

“It needs to set out a detailed agri-food export strategy, with complementary policies that will enable UK farmers to compete and adjust.”


Those were some of her more measured words, but she is right.

As always, agreements include carve-outs. How confident is the Minister about the predicted rise in exports given the protections to Australia’s services market? This is in stark contrast to the lack of protection given to the UK food sector in the tariff schedules. Were any of our devolved nations involved in adding to our 12 pages of carve-outs? As I understand it, the Australian states were consulted and state protections included. Were any of the concerns of the UK’s devolved authorities recognised and incorporated into our carve-outs?

I fear that the Australian agricultural corporations will not be held to the same high standards as our farmers. Animal welfare standards have been mentioned a number of times, but what the Government have agreed is a non-regression clause. To be clear, that does not mean that the standards will be the same in both countries. What will actually happen is that meat produced to lower animal welfare standards will get tariff-free access to the UK market. So much for the promise that the Government had no intentions of striking a deal that did not benefit British farmers. Australia’s former negotiator said:

“I don’t think we have ever done as well as this.”


How much engagement did the National Farmers’ Union have after the agreement in principle was published? Was the NFU given the opportunity to raise concerns or make counterproposals? More importantly, was it able to assess the true impact of the FTA before it was finally signed?

The UK granted Australia generous agricultural market access. Why was this not leveraged to press Australia for more ambitious commitments on climate change? As we have heard, there is no reference to the temperature goals which were fundamental to the Paris Agreement, nor to reducing Australia’s reliance on coal, which was addressed in the free trade agreement with New Zealand. As my noble friends Lady Liddell and Lady Hayter have said, we now have a Labor Government in Australia so there is an opportunity to revisit it.

With the energy security Bill making its way through Parliament, this feels like a missed opportunity for the Government to show leadership on the world stage on an issue which is increasingly global, instead of taking an insular approach. Tariff-free access to our UK markets is a prize that Ministers should not give away easily. However, looking at the concessions made by this Government, are we not right to worry? This was a deal the UK Government “were advised” they had to do for the bigger prize of CPTPP accession. I would like to hear the Minister’s views on that.

I return to my opening point, and I cannot put it any better than the noble Lord, Lord Kerr of Kinlochard, with regard to this Australian deal. We are allowed only to debate it; we can do nothing about it.