IT was difficult to know quite what to think upon hearing George Eustice’s remarkable comments on the Australia trade deal done by the Conservative Government, and agreed when he was a member of the Cabinet.
Mr Eustice’s intervention would have been comical in the extreme, were the real-world ramifications of the Australia deal not so serious. However, the deal has very real negative implications for farmers in Scotland and elsewhere in the UK, among others, so utter exasperation seemed like a more apposite reaction.
So what did Mr Eustice, who was Secretary of State for Environment, Food and Rural Affairs until September and is now a back-bencher, have to say?
He told the House of Commons last week: “The first step is to recognize that the Australia trade deal is not actually a very good deal for the UK, which was not for lack of trying on my part.”
The first part of this statement was not, of itself, remarkable, although it is certainly a euphemistic way of putting things. “Not actually a very good deal” does not really cut it. “Bad” would be an appropriate description of the deal, and would have saved a few words.
What was astounding about Mr Eustice’s declaration, however, was that it came from a Brexiter who was part of the Cabinet when the Australia deal was agreed in 2021.
It is also worth noting that it was not as if Mr Eustice and other Cabinet members at the time had not been warned about plowing ahead with the Australia trade deal in the form that was ultimately finalised.
The farming community, in Scotland and elsewhere in the UK, made its views more than plain. So did Scottish Government ministers.
Scottish Cabinet Secretary for Rural Affairs Mairi Gougeon, in an open letter in May last year to then international trade secretary Liz Truss, wrote: “As we have been clear since the Scottish Government’s response to your Department’s consultation on future FTAs (free trade agreements) in 2018, an FTA with Australia must not undercut Scotland’s world-leading food standards or lead to a zero tariff/quota agreement. At a time when UK agri-food producers are facing significantly greater barriers to trade with Europe – the sector’s largest export market – it would be incomprehensible for the UK Government to sign up to a trade deal that would facilitate mass imports of Australian agri-food produced to a lesser standard. A trade deal that liberalizes tariffs for Australian farmers, to put it bluntly, will put UK farmers out of business.”
Weeks later, Ms Gougeon and Northern Ireland’s Minister of Agriculture, Environment and Rural Affairs, Edwin Poots, sent a joint letter to Ms Truss hammering home fears over the effects of the free trade deal that had by then been agreed in principle with Australia.
The Scottish and Northern Irish rural affairs ministers told Ms Truss: “We have previously stressed to you, and remain extremely concerned following the recent announcement, that the UK Government is signing up to a deal that would lead to a sustained increase in imports of Australian agri-food and produced to lower standards in relation to animal welfare and future environmental commitments. As you know, agriculture and food standards are devolved responsibilities.
“We have been clear that where there is an increase in imports of Australian agri-food, this must be managed by tariff rate quotas that are not eroded over time. This is to ensure that domestic producers are protected and not disproportionately impacted. A proposed fifteen-year cap on imports will provide no comfort for our farming communities and would set a very precedent damaging for future FTAs (free trade agreements) yet to be agreed.”
Ms Gougeon and Mr Poots expressed concern over the size of quotas “which after 15 years equate to 16% of UK beef consumption and 49% of UK sheepmeat consumption”.
So the Conservative Government had plenty of warning.
What appeared to be the case at the time, however, and nothing that has happened in between times has changed this impression, is that the UK Government was in an unseemly hurry to conclude a trade deal with Australia.
This seemed to stem in large part from the Tory Brexiters’ abject failure to deliver the huge new trade deals that they promised the electorate would bring major gains for the UK after it left the European Union, a departure which it must be realized saw the country lose the enormous benefits of being part of the world’s largest free trade bloc.
Of course, any net benefit from an Australia deal, even in the most advantageous form, was always going to pale into complete insignificance relative to the massive damage stemming from the loss of frictionless trade and the ending of free movement of people between the UK and EU countries.
However, it seemed that the Tories nevertheless felt they could bang the drum loudly about an Australia trade deal and the electorate would be happy. Maybe this was something to do with the Boris Johnson administration’s seeming obsession with the Commonwealth, and some extremely outdated notions about what is big and what is not in terms of world trade.
Interestingly, Mr Eustice himself highlighted last week the rush that the UK was in to do a trade deal with Australia, come what may.
Asking what lessons could be learned from the Australia trade deal, Mr Eustice said: “First, and most important, we should not set arbitrary timescales for concluding negotiations. The UK went into this negotiation holding the strongest hand – holding all the best cards – but at some point in early summer 2021 the then trade secretary my right [honourable] friend the member for South West Norfolk [Liz Truss] took a decision to set an arbitrary target to conclude heads of terms by the time of the G7 summit, and from that moment the UK was repeatedly on the back foot. In fact, at one point the then trade secretary asked her Australian opposite number what he would need in order to be able to conclude an agreement by the time of the G7. Of course, the Australian negotiator kindly set out the Australian terms, which eventually shaped the deal.”
To say the UK was on the back foot is putting it mildly. And this is not just with the Australians – any country with which the Tories have discussed trade deals in recent years must surely have sensed desperation as the Brexiters have attempted to show some benefits from EU exit, so far it appears to no avail.
Mr Eustice seems very dissatisfied indeed with the Australia deal.
In this regard, however, we should perhaps bear in mind what appear to be most unrealistic expectations among Brexiters in general about the UK’s clout on the world stage these days. We are a long way away indeed from days of Empire but it is not clear that many Brexiters realize this.
Mr Eustice declared: “Let us not forget that, while we are about to open our market to unbridled access for Australian beef, Australia remains one of the few countries left in the world that maintains an absolute export ban for British beef. Not a single kilo of British beef can be sold in Australia since it maintains a protectionist ban, using the BSE – bovine spongiform encephalopathy – episode as a sham reason for doing so.”
Laying out his position, Mr Eustice told the House of Commons: “I was in the Cabinet in 2021 and I was on the Cabinet sub-committee that argued over the Australian trade deal – for, yes, there were deep arguments and differences about how we should approach it – but since I now enjoy the freedom of the back benches, I no longer have to put such a positive gloss on what was agreed. I hope my right [honourable] friend [Minister for Trade Policy Greg Hands] will understand my reason for doing this, which is that unless we recognize the failures the Department for International Trade made during the Australia negotiations, we will not be able to learn the lessons for future negotiations.
“There are critical negotiations under way right now, notably on the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) and on Canada, and it is essential that the Department does not repeat the mistakes it made.”
Trying to appear less desperate to do trade deals might improve the UK’s negotiating position but, given the overarching reality, only at the margin.
Mr Eustice describes negotiations on a Canada trade deal and on the CPTPP as “critical”.
That is hugely overstating things, given any benefits even from the most advantageous deals on these fronts would be very small indeed relative to the huge losses from Brexit. This is a simple truth, and one that Mr Eustice and his fellow Tory MPs would do well to bear in mind.