Australia Free Trade Agreement

Baroness McIntosh of Pickering Excerpts

Monday 11th July 2022 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted to follow the noble Lord, Lord Bilimoria. I wonder whether his asking for lower taxes was his pitch to be the next leader of the Conservative Party.

I will start with the noble Lord’s comments about the Northern Ireland protocol. Clearly, it needs to be revised, but I add some words of caution: it is a fundamental part of the UK-EU withdrawal agreement. We need to treat that very sensitively indeed.

I congratulate the noble Baroness, Lady Hayter, and her committee on not just preparing the report but bringing the debate to the House this afternoon. I add my thanks to and pay tribute to my noble friend Lord Grimstone, who was extremely assiduous, charming and generous with his time at every stage of every debate he participated in. I pay a personal tribute to him and wish him well. I am sure we have not seen the last of his interventions as a Minister.

My approach to this free trade agreement is cautious. I highlight the fact that criticisms have been made, notably in the report before us but also by the EFRA Committee next door and others, and the fact that the Trade and Agriculture Commission can examine agreements only once they have been signed, which has been criticised in previous debates. I think we in Parliament would all sign up to the fact that the commission should be able to intensively scrutinise and make recommendations on each agreement before it is signed. I hope that is something the Government might keep under review.

In that regard, these agreements are seen to fall short in content and scrutiny. I add to that my criticism that there appears to be a lack of strategy in negotiating trade agreements, which is illustrated by this agreement in particular. I am grateful that the committee has annexed to the report in its appendix 3 an extract from the UK Government’s strategy for the UK-Australia free trade agreement. The Government published their public negotiating objectives for a free trade agreement with Australia but there does not seem to be an overarching strategy.

I single out the two paragraphs that relate to sanitary and phytosanitary standards. Here, the Government commit to:

“Uphold the UK’s high levels of public, animal, and plant health, including food safety”


and:

“Enhance access for UK agri-food … to the Australian market by seeking commitments to improve the timeliness and transparency of approval processes for UK goods.”


My first question to the Minister is: how can we hold the Government’s feet to the fire on sanitary and phytosanitary standards? It strikes me, and I am not the first to mention this in the debate, that this agreement is yet another asymmetrical deal that benefits the other side, the Australians, much more preferentially than the UK. I am sure the noble Lord, Lord Purvis, will agree because he made the same point when debating other agreements. I also point out that it adds value of only 0.02% to the UK economy, so I really have to hesitate before we congratulate ourselves too warmly in this regard.

The Government were elected, what seems like a long time ago in 2019, on a manifesto that committed to maintaining high standards of production and, in particular, of animal welfare, environmental protection and food hygiene and safety. Not long after that election, the NFU ran a very successful campaign and persuaded 1 million people in this country to sign a petition calling for these standards to be maintained. Yet, as the Great Yorkshire Show starts tomorrow and runs for the rest of this week, the farmers will explain to all, including one of the leading negotiators in Defra, Janet Hughes, who is looking at future farming policy in this country, how vulnerable farmers feel at this time. I entirely endorse the comments of my noble friend the Duke of Montrose in this regard.

It is the hill farmers and the uplands of the north of England that are suffering, as well as other parts of the UK. We have seen rising energy costs, higher fuel prices and an acute shortage of labour, which means that many fruits and vegetables, including salads, will simply not be picked this year. We are about 40% down on the labour we would usually have through seasonal workers. That is partly because the Ukrainians cannot come and help, but we simply have not attracted enough seasonal farm workers this year. I hope that will be put right in the SAWS agreement on seasonal agricultural workers in 2023.

If we do not resolve these issues, particularly as regards suckler cows and spring lambs in the hill farms and uplands of the north of England, and other parts of England and the United Kingdom, we will have the most severe social crisis for generations in our countryside. That is the backdrop against which the Great Yorkshire Show will meet this year. I hope these pleas will not fall on deaf ears in the Government.

I conclude by asking my noble friend the Minister what he feels that the agreement that is the subject of the report this afternoon will offer us, over and above what we would have had in the rollover agreements. What will particularly benefit UK farmers and other industries in this country?

--- Later in debate ---

[Lord Udny-Lister (Con)]

My Lords, I stand, I think, as one of the few to welcome what is a landmark deal. It is an ambitious one and quite an exciting one, because it is the first of the new form of deals that are being struck. It is also a rekindling of our historic and important relationship with Australia through free trade. It is part of our post-Brexit journey. It is also a moment when we can go back to what we used to have with that country and to those relationships which were so brutally terminated when we joined the EU. We have a real chance to develop this further, and I will talk about the CPTPP in a minute. It is all about global Britain and the opportunities that exist.

In speaking, I draw attention to my interests, which are declared in the register, including my work for HSBC bank. I also thank the noble Baroness, Lady Hayter, for getting this debate. There is another thank you I want to make, and that is to the noble Lord, Lord Grimstone. It is very sad that he has given up as the Trade Minister. I am one of the few, probably, in this Chamber who have seen him at work, actually negotiating. He was an impressive operator. It will be very difficult to follow him, and he is going to leave a real gap.

The report before us rightly points to the identification of several risks. However, I want to observe that, in our long and very proud history as an island trading nation, I cannot point to a single moment in time where we entered in good faith into trading arrangements without there being some element of risk. Our task is to scrutinise FTAs that come before Parliament. It should not focus solely, as some Brexit-loathing commentators would have it, on risk alone, for our task is to weigh up risks against the opportunities that will come, and to seek to hold the Government to account on how they unlock these opportunities to the benefit of every part of the United Kingdom.

A lot has been said on the topic of agriculture. Indeed, the National Farmers’ Union, among others, has tried to peddle a myth that this agreement fails to deliver for British farmers and that our standards will somehow be eroded. I put it to your Lordships’ House that such assertions are wrong, as the Government have been successful in achieving significant safeguards for British farmers, namely through the tariff rate quota, the product-specific safeguard and the bilateral safeguard measures.

When it comes to food standards, it is worth noting that the FTA does not create any new permissions for imports from Australia, and that our stringent world-class import requirements and independent food regulations all remain. Perhaps it is for some an inconvenient truth, or it simply goes against the Brexit-bashing narrative to which some have become accustomed, to accept—as we should all proudly accept—that the UK is already globally renowned for our agricultural excellence, animal welfare and food safety standards.

There is nothing in this agreement that farmers should fear. Like those in most other sectors, they would do well to ignore the Brexit doomsayers who will always try to spread fear in the hope of overriding the largest democratic mandate in British history and the sound decision of the British people to seek a new global outlook, free from EU protectionism. I fully concur with the views of the honourable George Brandis, who in an interview with the Financial Times called for farmers to be

“more open to the benefits of trade and international competition”,

and for the

“culture of fear of global trade”

to come to a swift end.

[Baroness McIntosh of Pickering (Con)]

I am sorry to interrupt, but does my noble friend share my concern that there should be a level playing field, so that any imports into this country from Australia should not be produced with pesticides which are banned in this country or the rest of the EU, and should not be raised to standards which we and British consumers would not accept? If that is the case, I think that he will share my concerns about the agreement as negotiated.

[Lord Udny-Lister (Con)]

I am afraid that I do not agree with this, because I think that the standards that exist in Australia are not that different from the standards here. I would also suggest that, certainly on animal husbandry, there are many other countries in the world with which people would have a lot more difficulty than they do with Australia—I can think of parts of eastern Europe where probably the standards are well below those which we are currently getting from Australia.

The deal is our gateway for joining the CPTPP. With demand for beef and lamb increasing in the Asian markets, there is an unprecedented opportunity for our farmers to capitalise on what is going to become exports of very high-quality British meats—but of course they are going to have to be of a standard and are going to have to be marketed in the right way.

The deal supports British farmers, protects our standards, advances animal welfare through non-regression clauses, and creates new and incomparable opportunities for our food and drink exporters. Our free trade agreement with Australia will not only unlock over £10 billion-worth of additional bilateral trade but, as the global economy increasingly centres on the high-growth, high-tech Indo-Pacific region, as I mentioned just now, we must remember that our accession to this agreement is an integral component of the United Kingdom’s journey to joining the CPTPP. The importance of this cannot and must not be downplayed, for our accession to the CPTPP will give the UK access to a free trade area encompassing 11 strategically important states, with a combined GDP of some £8.4 trillion.

It is estimated that there are currently 15,000 UK businesses that are already exporting goods and services to Australia. Through breaking down regulation, protecting innovation, enhancing consumer protection and creating new visa pathways, this agreement has the potential to deliver for each and every one of them.

The Government will be tested on how effective they are in supporting UK businesses to make the most of this landmark agreement. I would welcome comment from my noble friend the Minister on what work is being done by the Department for International Trade to ensure that UK businesses are engaged and ready and waiting to unlock the ultimate potential of an FTA.

I further welcome how this agreement will create new opportunities for the UK’s world-class legal profession. It is universally acknowledged that our legal, financial and other professional services are among our greatest exports, and I commend the way in which Her Majesty’s Government have sought to protect and enhance the UK’s interests here, from providing UK law firms with legally guaranteed access to Australian government contracts for legal services to improving the mobility of lawyers in order to enhance their experience by working abroad. I stand encouraged by the way in which the Government have listened to the sector and hope that the support shown for our professional services sector in this agreement will set a precedent for future FTAs.

I am further pleased to note Her Majesty’s Government’s success in achieving their negotiation objective on digital trade across all sectors of the economy. I concur that there is still a lot of work to do in fine-tuning the regulatory framework and putting this into practice on the ground, and thus I would welcome some reassurances from my noble friend that the department are undertaking further work in this area.

The opportunities for this free trade agreement should motivate and excite us, whether you want to see the UK’s high-tech industries of AI and space exploration thrive, are a young person seeking exciting opportunities down under or are simply a consumer—like many of your Lordships, dare I predict?—looking forward to tariff-free wine or Vegemite. To conclude, there is something in this agreement for everyone, and I wish the Government godspeed in making sure that it delivers for everyone and as part of the United Kingdom’s journey towards the CPTPP.