Future Free Trade Agreements

Debate between Paul Beresford and Angus Brendan MacNeil

Thursday 21st February 2019 Commons Chamber

[Sir Paul Beresford (Mole Valley) (Con)]

As usual, I have a couple of declarations to make. First, I belong to the National Farmers Union, not as an active farmer but certainly as a member in this country. With my background that is to be expected. Secondly, as my accent has already made clear, I have dual nationality. I come from New Zealand and I have a New Zealand passport. I also have a UK passport and I have lived here longer than there. I am extremely supportive of what the Secretary of State for International Trade and President of the Board of Trade, my right hon. Friend the Member for North Somerset (Dr Fox) says, particularly when he talks about negotiations to join the TPP, and working on negotiations for a deal with Australia and New Zealand. Australia and New Zealand can teach us a number of things as we head into a field that they headed into as we went into the EU.

There are at least two relevant factors involved in the negotiations on going into the TPP. First, most people see Britain as an asset as a TPP partner. After all, free trade agreements are two-way—or perhaps I should say that they cut both ways. Secondly, as I have made clear, we almost certainly have at least two friends, two Commonwealth friends, who have been supportive for generations, even kith and kin. They will be supportive as we move towards the TPP.

When we went into the Common Market, New Zealand’s trade with this country teetered overnight from 90% to 50%, and then dwindled to 5%. It must find it a bit strange and have a wry smile that we want to go back. Fortunately, it is most likely to be helpful and positive to our interest, but equally, we must remember, with its own interests definitely in mind. After the crash of the New Zealand economy when we entered the then Common Market, New Zealand and Australia forged an aggressive export drive. They also shocked their economies into action. In New Zealand’s case, I remember the Prime Minister, a few years after that trade blow, explaining to one of our well known characters on the “Today” programme that it had lifted its trade export market to over 100 more countries. We need to watch that as we go out. There was a slight but not too serious hiccup between Australia and New Zealand when a small group of Australians suggested that New Zealand should become another state of Australia. That generated much antagonistic steam. In fact, the New Zealand Prime Minister at the time stated that

“Any New Zealander moving to Australia would increase the IQ of both countries.”

I am sorry that the hon. Member for Australia and Scotland has left the Chamber. [Laughter.]

The main export for New Zealand then and now is agriculture. New Zealand farming was radically shaken up very quickly. Farming subsidies were removed at a stroke overnight, but so were the restrictions. The freedom that gave those farmers made such a difference to them entering a really effective market. Farming became an industry. It became open, competitive and free market. Australia did much the same. They will be our competitors and partners both through our trade agreements and if we go into the TPP.

I find the thought of a Pacific link curious, because the only UK geographic link to the Pacific is the overseas territory of Pitcairn Island. As has been said, I understand that Simon Birmingham, the Australian Trade Minister, did not sound particularly enthusiastic—we heard a couple of quotes. Contrary to that, however, he has also said that Australia is ready to fast-track some sort of deal with the United Kingdom. New Zealand, on the TPP, was a little more confrontational. Commenting on New Zealand’s membership of the TPP, Catherine Beard, the executive director of ManufacturingNZ and ExportNZ said:

“New Zealand would benefit from $222 million in tariff savings yearly.”

As an NFU member, I am also aware that she said:

“Agriculture is widely expected to be a big winner with kiwi fruit, beef, wine, dairy, forestry, and seafood products all expected to benefit from savings on tariffs and the chance to more easily make aggressive entries into foreign markets.”

That could be a warning for us. I think of that when I look round my Mole Valley farms. My constituency has a dairy farm that is supposed to be big. It has 350 cows. Mole Valley has sheep farms with perhaps 1,000 sheep, and some of those farms get 90% of their income from subsidies. These farms are tiny compared with New Zealand and Australian farms. Two dairy farms near where I lived as a youngster in New Zealand milk 1,500 and 2,500 cows, twice a day. The farm I came off in the middle of the South Island had 1,000 head of cattle, 1,000 head of deer and 23,000 lambing ewes. When they lambed we had 50,000 sheep. The land, the atmosphere and the weather resembles much of the hill country of Scotland. It is right up where “Lord of the Rings” was filmed.

We have nothing to compare with that here in the UK. The size and the power of the industry in New Zealand could shatter our farming. If we are going for free trade, we have to wake up. We have time. We can do something about it, but we have to give our farmers the chance to dramatically improve. There is protectionist talk of product care and standards matching ours. That is the correct approach, but it is the correct approach for food safety reasons, but not for protection because Australia and New Zealand meet those standards already.

Vineyards are another classic example. There are square miles of vineyards in New Zealand. You can stand on a high hill and see nothing but vineyards.

[Angus Brendan MacNeil]

The hon. Gentleman talks about improvement. I just wonder what he means by that. Does he mean expansion and growth? When he talked about having 23,000 sheep, with 50,000 after lambing, my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) asked me, “How many do you have?” I said 32—just 32. We are talking about a hugely different scale. Is he talking about farms in the UK getting bigger and amalgamating, and a whole change in the structure of UK farming?

[Sir Paul Beresford]

There is a list of ways in which we can look at that. Perhaps I can answer with an old story. I was upbraided by my farmers some time back and they finished with an anti-politician joke. I explained to them that the son of one of my Surrey farmers had gone out to New Zealand and had bought a farm the same size out there. When shearing time came around, he called up the shearing contractor and said, “Will you come and shear my sheep?” The contractor said, “I’ve got two gangs near you. One’s up the Waimakariri and they have 17,000 sheep to go, and the other ones can be with you next week. How many sheep have you got?” He said, “17.” The contractor said, “17,000?” He said, “No, no—17 sheep.” The contractor said, “Oh, are you English?” He said, “Yes.” The contractor said, “Are you from Surrey?” He said, “Yes.” The contractor said, “Right —you’re English, you’re from Surrey, and you have 17 sheep. Can you tell me their names?”

What I am getting at is that we have an opportunity—I will touch on this in a minute—to counteract that. Australia is a huge agricultural producer. The gross value of Australian farm products in 2016-17 was $60 billion. The Australians export about 77% of what they grow and produce. Fortunately, through the TPP and other arrangements, those two nations are pouring their products into Europe, China, the middle east and even the US, and they are not fulfilling their quotas. There is a real opportunity for us to improve our efficiency in farming and everything else, because Australia and New Zealand may well be looking for us to help them to fulfil those quotas, including, particularly, the quota for lamb meat going into the EU.