Free Trade Agreement Negotiations: Australia - Statement

– in the House of Lords at 1:45 pm on 24th June 2021.

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The following Statement was made in the House of Commons on Thursday 17 June.

“I wish to make a Statement on the new UK-Australia free trade agreement secured by our Prime Ministers this Tuesday. We have agreed a truly historic deal, which is the first negotiated from scratch by the United Kingdom since leaving the European Union. This gold-standard agreement shows what the UK is capable of as a sovereign trading nation: securing huge benefits such as zero-tariff access to Australia for all British goods and world-leading provisions for digital and services, while making it easier for Brits to live and work in Australia.

The agreement also paves the way for the UK’s accession to the vast market covered by the comprehensive and progressive agreement for trans-Pacific partnership, coupling us with some of the world’s largest and fastest growing economies, worth £9 trillion in global gross domestic product. Our Australia deal shows that global Britain is a force for free and fair trade around the world. We believe in 21st-century trade. We do not see it as a zero-sum game like our critics, who doubt we can compete and win in the global marketplace. We want to be nimble, positive and open to new ideas, talent and products, without sacrificing our sovereignty.

We have laid out the core benefits of this deal in the agreement in principle document. It means that £4.3 billion-worth of goods exports will no longer have to pay tariffs to enter the Australian market, from Scotch whisky and Stoke-on-Trent ceramics to the 10,000 cars we currently export from the north of England. Meanwhile, we will enjoy greater choice and top value in Aussie favourites such as wine, swimwear and biscuits. Young Brits under the age of 35 will be able to live and work in Australia for up to three years with no strings attached. Our work and mobility agreement goes beyond what Australia agreed with Japan or the US, making it much easier for Brits to live and work in Australia.

We have agreed strong services and digital chapters that secure the free flow of data and the right for British lawyers and other professionals to work in Australia without needing to requalify. We have secured access to billions of pounds in government procurement, which would benefit businesses such as Leeds-based Turner and Townsend, which is contracted to expand the Sydney Metro.

This deal promotes high standards, with the first animal welfare chapter in an Australian trade deal, as well as strong provisions on climate change, gender equality and development. On agriculture, it is important that we have a proper transition period. That is why we have agreed 15 years of capped tariff-free imports from Australia, which means that Australian farmers will only have the same access to the UK market as EU farmers in 2036. We should use this time to expand our beef and lamb exports to the CPTPP markets, which are expected to account for a quarter of global meat demand by 2030. I do not buy this defeatist narrative that British agriculture cannot compete. We have a high-quality, high-value product that people want to buy, particularly in the growing middle classes of Asia.

This Australia deal is another key step to joining the trans-Pacific partnership, a market of 500 million people that has high-standards trade, 95% tariff-free access and very strong provisions in digital and services, which are of huge benefit to Britain, the second largest services exporter in the world. It covers the fastest growing parts of the world, where Britain needs to be positioned in the coming decades. While some look to the past and cling to static analysis based on what the world is like today, we are focused on the future and what the world will be like in 2030, 2040 and 2050.

Of course, Parliament will have its full opportunity to scrutinise this agreement. Our processes are in line with those of other parliamentary democracies, such as Canada and New Zealand; the Trade and Agriculture Commission will play a full role, providing expert and independent advice; and the House can rest assured that this deal upholds our world-class standards, from food safety and animal welfare to the environment.

Following the agreement in principle, we will finalise the text of the full FTA agreement, which will then undergo a legal scrub before being presented to Parliament, alongside an economic impact assessment. I look forward to further scrutiny from the Select Committee on International Trade and the Chair of the Select Committee on Environment, Food and Rural Affairs.

This deal means we have now struck agreements with 68 countries plus the EU, securing trade relations worth £744 billion as of last year. The deal with our great friend and ally Australia is just the start of our new post-Brexit trade agreements. It is fundamentally about what kind of country we want Britain to be. Do we want to be a country that embraces opportunity, looks to the future, and believes its industries can compete and that its produce is just what the world wants? Or do we accept the narrative some peddle that we need to stay hiding behind the same protectionist walls that we had in the EU, because we cannot possibly compete and succeed? To my mind, the answer lies in free trade. Our country has always been at its best when it has been a free-trading nation. This deal is a glimpse into Britain’s future—a future where we are a global hub for digital and services, where our high-quality food and drink and manufactured goods are enjoyed across the world, and where we are open to the best that our friends and allies have to offer. That is what this deal represents, and I commend this Statement to the House.”

Photo of Lord Grantchester Lord Grantchester Shadow Spokesperson (Energy and Climate Change), Shadow Spokesperson (Business, Energy and Industrial Strategy) 1:54 pm, 24th June 2021

My Lords, I thank the Minister for his letter and the Government for their update on the progress of the UK’s trading relationship with Australia. I had been waiting for the detail, following the announcement at the end of the G7 conference, as it seemed from reports that nothing had been signed and was unlikely to be before October or November this year. The information was released under the cover of darkness, on the night of 17 June. I imagine this was the time that Tony Abbott, on behalf of the Secretary of State, signalled agreement with the Australian counterpart, Dan Tehan. The information reveals it to be a series of commitments that the Government have entered into to agree many details yet to be worked up. Can this be described as “historic”, as claimed in the Statement?

These commitments were translated into negotiating wins for the Government: tariff reductions for UK exports of food, drink, clothing and cars; provisions for the under-30s to work in Australia to be extended to those under 35; and reductions in barriers for services exports, and data and digital exports. I certainly congratulate the Government on them, but none of these so-called wins has ever been controversial or problematic for Australia. Its tariffs on UK goods were already very low, and making it easier for young people to work in Australia is a positive boost to the Australian economy, particularly its farming industry, which relies on casual labour from British backpackers.

What do the Australians make of these commitments? Would the meaning of “historic” be revealed on their website? Indeed, yes, as the Australians could not believe what they had achieved. Yes, it was only, as they put it, an agreement in principle—AIP—but, to them, these commitments are locked in to benefit Australian farmers and workers, as well as their consumers. We begin to see a different perspective: one that highlights the fears of the farming industry throughout all parts of the UK, and perhaps suggests why the Secretary of State for Defra was so alarmed in Cabinet.

The Government describe the agreement on beef and sheep as securing 15 years of capped, tariff-free imports, while the Australians state it as 10 years, as the subsequent five years include enough significant extra volumes as to be pretty meaningless. But the cap on volumes rises in significant leaps, all without tariffs, in complete contrast to the agreements the Australians had achieved in recent deals with Japan, China, the USA and South Korea, where tariffs on their beef were reduced gradually in the various deals between 10 and 18 years, with additional safeguard triggers.

This deal has historic elements for Australia. The trade expert and former Australian negotiator, Dmitry Grozoubinski, described it as follows:

“I don’t think we have ever done as well as this. Getting rid of all tariffs and quotas forever is virtually an unprecedented result.”

Has the Minister worked out what this means for the UK? We await the impact assessment and the reconstitution of the Trade and Agriculture Commission to assess the AIP, as required in the Agriculture Act and Trade Act, as secured by your Lordships’ House last year. In the meantime, it seems to mean that Australia would be able to increase its beef exports to the UK to more than 60 times their 2020 levels in the first year before any quota would apply. Australia could export four times more beef to the UK in the first year of the deal than it did to the whole of Europe in 2020 before any quota would apply. Indeed, the UK would leap from 27th place to sixth in the global ranking of Australia’s biggest beef exports markets if Australia were to use its full quota in the very first year.

This commitment offered to the Australians has triggered an array of angry responses from agriculture in all corners of the UK, especially the devolved Administrations, where agriculture is such an important part of their economies. The Welsh have particular concerns for their lamb, and Northern Ireland for its dairy trade. While Scottish whisky producers will be pleased, Scotland’s agricultural input suppliers will be concerned, along with its beef producers.

Environmental groups, animal welfare groups, consumer groups on food and nutrition, and trading bodies are all concerned: Greenpeace, the World Wildlife Fund, Compassion in World Farming, and the National Trust are all alarmed. Sustain points out that Australia has no model conditions for animal welfare and no federal animal welfare legislation, opting instead to devolve responsibilities to states and territories. The world animal protection index, which ranks 50 countries according to their legislation and policy commitments to protect animals, has awarded Australia a D mark, versus a B for the UK. Being the first deal that the Government have signed after leaving the EU, even if only in principle, how will they negotiate their further ambitions to achieve deals with other countries, such as America and India? The Statement proclaims that this deal is only a precursor to the CPTPP deal that the Government have set their ambitions on next. Australia is committed to helping the UK sign up to this existing CPTPP deal without any changes or protections, as a deal taker not a deal maker. Do the Government see UK agriculture as a sacrifice worth giving up on the way to this further agreement?

The Government are truly making a hash of Brexit. The UK has left the EU, to be sure, but so far the Government see more mileage in being anti-EU than in being pro-British. The Secretary of State compared this deal to trade with the EU in her replies last week in the Commons, but our neighbours in Australia are not 20 miles away. First-quarter exports to Europe were down £2 billion during the first part of 2021. Sales of dairy products plummeted by 90% after the trade and co-operation agreement was signed at the last minute in December. As far as Europe is concerned, it seems that nothing is agreed until everything is agreed. As far as Australia is concerned, everything is agreed while nothing is detailed.

The Government are hopeless on trade after Brexit. Northern Ireland is in turmoil. The fishing industry, whose voice was so strongly for Brexit, has already been sacrificed. The steel industry is collapsing and farmers who also wanted Brexit to be successful for them have already had £255 million slashed from their budgets this year in reductions to BPS payments. The Welsh football fans are certainly unhappy that they cannot visit Amsterdam to support their team this weekend.

Many important questions remain. I finish by asking just a few. The interim Trade and Agriculture Commission made a series of important recommendations, including for the establishment of a new national framework of food and farming standards, against which all future trade deals could be judged. Can the Minister explain why there has not been a formal response to the commission’s report and why that national framework of standards is not yet in place? Have the Government made plans regarding a proper labelling of Australian beef, so that consumers can identify it clearly on menus and supermarket shelves? Have the Government demanded that the Australians raise their standards in correspondingly high leaps over the years in tandem with the increase in their agricultural supplies? Finally, what will be the cumulative impacts from all the deals that the Government plan if these follow the precedent of the Australian deal, or do the Government have plans to rescue the farming industry from the disaster that it sees ahead?

Photo of Lord Purvis of Tweed Lord Purvis of Tweed Liberal Democrat Lords Spokesperson (International Trade), Liberal Democrat Lords Spokesperson (International Development)

My Lords, I thank the Minister for his letter of 18 June with a copy of the agreement in principle and an explainer. He is very good at keeping the Front Benches informed in the House, which is appreciated.

These Benches that I speak for want more free, fair and open trade, for the UK to export more and for UK consumers to have a wider choice of higher-standard goods at globally competitive prices. We want trade deals to reflect growth in UK export potential, but we want them strategically used for wider social, climate, human rights, labour and environmental standards. We do not want them to be an opportunity for the UK to miss, to provide market access for other countries without commensurate or better gains for us.

The desperation of this Government to have any deal, no matter what, is noted among our trading partners, and they take advantage. A bad deal is better than no deal, it seems. On the much-heralded £15 billion Japan deal, £13 billion was for Japan and £2 billion for the UK. On this deal and the agreement in principle, UK exports to Australia will go up over 15 years by £500 million, the Government say, while Australian exports to the UK will go up by £700 million. That is about three royal yachts. The telling point on market access was in the bullet point that

“both sides formalise their agreement on splits of TRQs at the WTO and Australia withdraws its objections to the UK’s goods schedule.”

That was the giveaway. Australia has got exactly what it wants. It has withdrawn its objections at the WTO—objections which, I remind the House, this Government said had no foundation. It turns out that our negotiation had rather weak foundations. I co-chaired, with the Nigerian Trade Minister, a commission of inquiry looking at areas where we can expand Commonwealth trade. Why is there no reference to the Commonwealth in this agreement?

However, let me quote positively from the website of the Australian Department of Foreign Affairs and Trade:

“an ambitious and comprehensive FTA will assist with post-pandemic economic recovery by providing new opportunities in a highly significant market for Australian goods and services. It will provide Australian exporters with a competitive edge and more choices about where they do business. Australian consumers and companies stand to benefit through greater choice in goods and services at lower prices.”

That is the headline of the Australian Government of the agreement with the European Union, now in its 11th round. The Australian Government go on to say:

“We want an FTA with the EU to set the benchmark for what can be achieved between like-minded partners.”

The narratives for the EU and the UK are remarkably similar. The UK scoping exercise for this, an ambitious and comprehensive FTA for Australia, said that it would bring GDP growth ranging from 0.01% and 0.02% over 15 years. The EU scoping exercise in 2018 said that

“an ambitious and comprehensive FTA will bring about GDP growth ranging from 0.01% to 0.02% over 15 years.”

Why has a Brexit agreement no greater benefit than we would have had anyway? On goods, we are expecting an increase in exports of up to 7.4%, which is of course positive. In the Government’s own document, Australia is looking for exports to the UK to increase up to 83.2%. Why is there such a difference? It is estimated for the EU scoping exercise that EU exports to Australia could go up under their agreement by one-third. Why are UK exports up by 3.6% and European exports up by 36%?

On legal services, the Minister said to me on Tuesday that:

“It will contain provisions on legal services, as we have heard, but it will not confer the automatic ability for Australian lawyers to practise law in the UK.”—[Official Report, 22/6/21; col. 163.]

The fourth bullet point of the agreement in principle mentions:

“Legal services provisions which will both guarantee that UK and Australian lawyers can advise clients and provide arbitration, mediation and conciliation services in the other country’s territory using their original qualifications”.

I regret to say this, but I believe that the Minister misled the House. I hope that he has an opportunity to correct that at the Dispatch Box today.

Can the Minister explain why in the agreement there will be a chapter on mobility, which could well be positive, about companies sponsoring

“visas committed in the FTA without first having to prove that a national of the country in question could not be hired to do the job, through the reciprocal removal of economic needs”?

Is this now a direct repudiation of the points system that the Home Office has put in place, and, which will be the case—the UK Home Office points system for Australia or this trade agreement? On goods, during the trade negotiations the Government’s press release in November said that the Government had a suite of tools including tariffs, tariff quotas and safeguards to ensure that British farmers, with their high standards, were not unfairly undercut in any trade deal. However, the NFU said that it was not consulted, and none of these methods seems to have been used.

We know that, according to Food Standards Australia New ZealandFSANZ—around 40% of cattle are given hormone treatment, but the quotas for imports are currently for accredited hormone-free cattle. There is no differential quota guarantee in this outline agreement; will it be in the final agreement? Neonicotinoids are used on Australian crops—cotton, canola, cereals and sunflowers—but their use in the United Kingdom is banned. What guarantees are there that we will not import goods for which illegal pesticides have been used as part of their production? What guarantees are there that we will not import sows that have been reared in sow stalls, which have been banned in the UK since 1999? What guarantees are there that pigs raised by intensive farming methods and chickens reared in battery cages, which we have banned, will not be imported?

Finally, it is of course a fallacy to suggest that, if we are critical of this agreement, we are critical of free trade. We are critical of the Government’s ability to negotiate good trade agreements. If imported goods are cheaper, the Government say that they will safeguard against undercutting—but that is not in this agreement. Workers with skills having to get a visa because of economic need is not mentioned in this agreement. The continuing protection against hormones and pesticides that Defra has indicated is also not in this agreement. Who is in charge of our agriculture, immigration and economic policy?

Photo of Lord Grimstone of Boscobel Lord Grimstone of Boscobel The Minister of State, Department for International Trade, The Minister of State, Department for Business, Energy and Industrial Strategy

My Lords, it is a constant disappointment to me that Opposition Front Benchers find it difficult ever to say any nice things about trade agreements. Of course, the whole purpose of our striking them is to benefit British businesses and consumers. This deal with Australia eliminates tariffs on all UK goods, making it cheaper to sell products like Scottish whisky and cars to Australia, and supporting industries that employ 3.5 million people in the UK. It would be nice to hear some recognition of such positive impacts when we debate these agreements.

For our consumers, this means lower prices and better choice, and that includes iconic favourites such as Aussie wine, which I would not be surprised at all to learn that the two Front-Bench spokesmen enjoy from time to time. I recognise that the noble Lord, Lord Grantchester, has great expertise in farming matters, but I should make it clear that this deal will not undercut UK farmers unfairly or compromise our high standards. Indeed, we believe that it will open up opportunities in fast-growing markets such as CPTPP countries. It would be nice to hear some recognition of the fact that our farmers, who are among the best in the world, will be able to take advantage of these agreements.

I say categorically that, throughout the negotiations, we have listened closely to the concerns of farmers and other stakeholders, which is why we have agreed 15 years of capped tariff-free imports from Australia. This means that Australian farmers will only have the same access as EU farmers 15 years after the agreement comes into force.

Of course, so far, this agreement is only at the “in principle” stage, and the House will have an opportunity to scrutinise it fully. Some of the questions asked by noble Lords will be more easily dealt with once we have commenced that formal scrutiny. Let me explain for a moment what I mean by that. The agreement in principle signifies only that the main elements of the deal have been negotiated; both countries will now work together to continue to translate the agreement into legal text. Parliament will have full opportunity to scrutinise this agreement: the FTA treaty will be presented to it after signature, alongside an independently scrutinised impact assessment. I know how carefully the noble Lord, Lord Purvis, always reads those, and I am sure that he will find answers to his questions when that impact assessment is published.

Of course, the House will then have the benefit, for the first time, of advice from the Trade and Agriculture Commission, which we have debated many times in this House. Some of the really important points made by the noble Lord, Lord Grantchester, will no doubt be dealt with in that report. Once the Agriculture Act’s Section 42 report and the TAC’s advice have been laid in Parliament, there will then be a further chance to scrutinise these matters, so that will be the time to come back to some of these detailed points.

Turning to some of the specific points that have been raised, the noble Lord, Lord Grantchester, asked where we are with the very good report from the Trade and Agriculture Commission. It is still being carefully analysed, and I am sure the Secretary of State will make her views on it known to Parliament in due course.

I would like to deal specifically with the accusation the noble Lord, Lord Purvis of Tweed, made about my misleading the House. I categorically refute that suggestion, and I will explain why I am so categoric about that. This agreement allows lawyers from both sides to practise not domestic law, either in the UK or Australia, but foreign or international law in certain limited areas such as giving advice, arbitration or conciliation. These are not regulated matters, so it will be possible for an Australian lawyer to open an office in Edinburgh and put a sign on the door saying that he is an Australian lawyer, but from that office he will be able to offer advice on foreign and international law, on arbitration in relation to those matters, and to comment on Australian law. Having given that explanation, I would be grateful if the noble Lord felt able to withdraw his very serious allegation that I misled the House from this Dispatch Box.

I believe that this is a positive agreement. It is the first that we have negotiated from scratch since leaving the European Union, and it shows what we are capable of as a sovereign trading area. I believe that it will lead to a whole succession of broader and even better agreements going forward.

Photo of Baroness Pitkeathley Baroness Pitkeathley Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, we now come to the 20 minutes allocated for Back-Bench questions. I ask that questions and answers be brief so that I can call the maximum number of speakers.

Photo of Lord Robathan Lord Robathan Conservative 2:17 pm, 24th June 2021

My Lords, I declare an interest as the owner of a livestock farm in the Midlands. Before I ask my substantive question, I note something that the noble Lord, Lord Purvis, said. I think that sow stalls are still permitted in the European Union; could my noble friend clarify that?

I congratulate my noble friend, and all those in government involved in this, on an excellent start to an FTA that will be to the mutual benefit of the people of the United Kingdom and the people of Australia. Does he appreciate that, whatever carping he may hear in this House against free trade agreements, many here do not want the FTAs to succeed because they want to prove Brexit wrong? We heard that from the Labour Benches. They want to prove that Brexit was a terrible mistake, while the people of the United Kingdom will rejoice at the increased prosperity that this free trade agreement and others will bring them.

Photo of Lord Grimstone of Boscobel Lord Grimstone of Boscobel The Minister of State, Department for International Trade, The Minister of State, Department for Business, Energy and Industrial Strategy

My noble friend is quite right: Australian animal welfare standards are in fact higher than those in many other countries around the world, and in some cases higher than those in the EU. My noble friend has given one example. Others include the practice of castrating chickens and the production of foie gras, which are banned in Australia on welfare grounds, as they are in the UK; however, they continue to be permitted in the EU. Australia is marked five out of five—the highest possible mark—in the World Organisation for Animal Health performance survey.

Photo of Lord Curry of Kirkharle Lord Curry of Kirkharle Crossbench

My Lords, I welcome the opportunity to debate this FTA. Let me say something nice: I congratulate the Government on having negotiated this deal very speedily. Incidentally, I want this and other FTAs that will follow to succeed. I have two questions for the Minister. When the TAC, the Trade and Agriculture Commission, is eventually established and able to scrutinise the agreement, and when Parliament has a chance to debate it, will it be possible to amend the agreement if genuine concerns exist, or is it a fait accompli? Secondly, do this agreement and others that will follow put our free trade agreement with the European Union at risk?

Photo of Lord Grimstone of Boscobel Lord Grimstone of Boscobel The Minister of State, Department for International Trade, The Minister of State, Department for Business, Energy and Industrial Strategy

My Lords, I think the House is well aware of the scrutiny processes that these agreements go through. The process culminates in the CRaG process, in which the other place has the ability to vote against these agreements, so there will be scrutiny there. That provides a real bulwark. I do not know the answer to the question about the European Union, and if I may I will write to the noble Lord about that.

Photo of Lord Udny-Lister Lord Udny-Lister Conservative

My Lords, when I worked in No. 10 and was involved in the Brexit debate, I was told on many occasions by Members of this House and the other place from all political parties that Britain would never be able to negotiate any free trade agreements and did not have the capability—it was just folly—so I am really pleased today to be able to congratulate the Minister on getting this deal done, especially as the EU is still struggling with its deal. I am also delighted that he has not listened to the protectionist voices from various parts of our community.

Can the Minister please confirm to me that although the priority is the CPTPP, he will give equal priority to some of the others, particularly the GCC? In this, I declare my interests as the co-chairman of the UAE-UK Business Council, where tariffs are not the key issue. The key issue is the same as with Australia: professional qualifications, access to markets and generally the removal of red tape—all the things he has managed to deliver with the Australian deal.

Photo of Lord Grimstone of Boscobel Lord Grimstone of Boscobel The Minister of State, Department for International Trade, The Minister of State, Department for Business, Energy and Industrial Strategy

My Lords, it is a great pleasure to answer my first question from my friend and noble friend Lord Udny-Lister from this Dispatch Box. He is right: we are making extraordinary progress on negotiating these free trade agreements, and the free trade agreements we hope to strike not just with the Trans-Pacific Partnership but with the GCC, Canada, Mexico, India and a number of other countries around the world are designed entirely to benefit the British consumer. I welcome his support for that.

Photo of Lord Liddle Lord Liddle Labour

My Lords, now that we are out of the EU, I welcome trade deals we do with the rest of the world, though I have concerns about the agricultural dimension of this. I have great respect for the Minister as a highly intelligent and objective man. If he reads the Statement delivered in the other place, does he not agree that it is hyperbolic and propagandist? It is hyperbolic in the sense that it talks about “huge benefits”. Most economists estimate the benefit to UK GDP of this agreement to be about 0.2%. It is propagandist in that it talks about how we are no longer

“hiding behind the same protectionist walls that we had in the EU”.—[Official Report, Commons, 17/6/21; col. 453.]

He must recognise that in the new Pacific world to which we attach so much importance, Germany—a member of the EU allegedly held back by those “protectionist walls”—is able to export two or three times as much as we do at present.

Photo of Lord Grimstone of Boscobel Lord Grimstone of Boscobel The Minister of State, Department for International Trade, The Minister of State, Department for Business, Energy and Industrial Strategy

My Lords, I first thank the noble Lord for his kind comments. It is the case that politics sometimes enter into these matters in the other House. Maybe that is not a surprise, given the importance of these agreements. I hope the noble Lord agrees that when I comment on these matters in this House or in front of our very well-run IAC, I try to give my answers in a measured and constructive way.

Photo of Lord Foster of Bath Lord Foster of Bath Chair, Rural Economy Committee, Chair, Rural Economy Committee

My Lords, I think I welcome the Minister’s comment that the House will have the opportunity to fully scrutinise the text of the agreement, which will be presented after signature, but given the limited parliamentary oversight arrangements in both Houses, will he commit to presenting the document immediately after signature so that the committees have sufficient time to review the agreement before it is formally laid under the CRaG arrangements?

Photo of Lord Grimstone of Boscobel Lord Grimstone of Boscobel The Minister of State, Department for International Trade, The Minister of State, Department for Business, Energy and Industrial Strategy

My Lords, I can certainly confirm that the House will be given sufficient time to scrutinise these agreements, not just because that is right in its own instance but because our International Agreements Committee will want to scrutinise them. Importantly, the new, independent Trade and Agriculture Commission will need time to scrutinise this agreement properly. The sequence of events will be that the agreement will be laid in this House after signing, these other matters of scrutiny will then proceed, and only when that is completed will the agreement be brought back to the House formally to take its chance under the CRaG procedures.

Photo of Lord Lansley Lord Lansley Conservative

My Lords, this agreement could offer an opportunity for many smaller UK businesses to get into the Australian market. The economic impact and benefit for the United Kingdom could be much more if we can gear up our businesses to take those opportunities. The time to do that is now, even if the final FTA takes some time. Can my noble friend say what initiatives the Government are taking to work with businesses to achieve this?

Photo of Lord Grimstone of Boscobel Lord Grimstone of Boscobel The Minister of State, Department for International Trade, The Minister of State, Department for Business, Energy and Industrial Strategy

My Lords, my noble friend is absolutely right. A point I have made previously from this Dispatch Box is that it is not the signing of these agreements that is important but the operationalising of them afterwards, to the benefit of British businesses and consumers. Interestingly, we already have 13,400 UK SMEs—that includes micro-enterprises and sole traders—exporting goods to Australia. I completely agree with my noble friend that we have to mobilise our efforts to explain the advantage of this agreement to them. Chambers of commerce and intermediaries will have a valuable role to play. With our friends in Australia, we certainly intend to make the information on how to trade clear and easily accessible. There will be a dedicated website and a search database, but most importantly we will be out and about informing British businesses and customers of the advantages of the agreement.

Photo of Lord Carrington Lord Carrington Crossbench

My Lords, I declare my farming interests as set out in the register. As a carrot—forgive the pun—to win farmers’ support for this agreement, the Government have indicated investment in and funding of technology to improve productivity through ELMS. Can the Minister inform us of the status of the promised comprehensive cross-government strategy to improve productivity and competitiveness and, secondly, the promise to provide adjustment assistance for farming in the changing market conditions resulting from the new FTA?

Photo of Lord Grimstone of Boscobel Lord Grimstone of Boscobel The Minister of State, Department for International Trade, The Minister of State, Department for Business, Energy and Industrial Strategy

The noble Lord, Lord Carrington, asks two important questions. If I may, I will consult my ministerial colleagues in Defra and write to him on these matters, so that I can give him a full answer.

Photo of Lord Inglewood Lord Inglewood Non-affiliated

My Lords, I declare my agricultural interests in the register. In particular, I am a livestock farmer, but I have no fears about competing with Australian imports on price. However, does the Minister not agree that if agricultural imports from Australia—or from anywhere else, for that matter—are not subject to the equivalent welfare, phytosanitary and husbandry standards and so on that apply to domestic production, that gives foreign producers financial advantage over domestic producers in the UK market, and that this is unfair competition for UK producers? Further, does he not agree that arguments to the contrary echo the thought processes of those who supported the abolition of slavery but at the same time supported the slave trade?

Photo of Lord Grimstone of Boscobel Lord Grimstone of Boscobel The Minister of State, Department for International Trade, The Minister of State, Department for Business, Energy and Industrial Strategy

My Lords, I am happy to confirm to my noble friend that there will be absolutely no diminution of the controls that we apply to imported agricultural produce. As he will know, our phytosanitary regime is very strong. I sometimes hear scare stories from noble Lords that, for example, hormone beef will be allowed into this country as a result of this agreement. I can put people’s minds completely at rest on this: we will be maintaining our strict animal health standards and our own animal welfare standards.

Photo of Lord Hannan of Kingsclere Lord Hannan of Kingsclere Conservative

My Lords, how extraordinary that there should be this opposition to a trade deal with Australia—a country with which we enjoyed the closest commercial relations before the artificial diversion of our trade by the phased imposition of European tariffs and non-tariff barriers in the 1970s. It is a country to which we could hardly be closer in language, law, accountancy systems and interoperable regulations. Does my noble friend the Minister find it odd that in this debate Australian trade is attacked on the contradictory grounds that the deal will wipe out our agriculture while making little difference? Does he detect behind those questions the real problem, which is nostalgia for EU membership? We heard it in almost every intervention from the Benches opposite—a few desultory remarks about Australia and then a prolonged complaint about Brexit. Does he share my surprise that people who spent the referendum brandishing their internationalist credentials have, on this issue, now descended into mercantilism, protectionism, nostalgia and fear?

Photo of Lord Grimstone of Boscobel Lord Grimstone of Boscobel The Minister of State, Department for International Trade, The Minister of State, Department for Business, Energy and Industrial Strategy

My noble friend makes an important point. If someone came to listen to these proceedings for the first time, they would think we were debating an agreement with a hostile country—a country with which we had perhaps had a long period of enmity. This agreement, and the agreements that we are hoping to strike with New Zealand, Canada, India and elsewhere, are with our Commonwealth friends. I detect that nostalgia for the EU on the other Benches. I just wish I could also detect a nostalgia for the Commonwealth and dealing with those countries that have stood by us for many years.

Photo of Baroness Bennett of Manor Castle Baroness Bennett of Manor Castle Green

My Lords, this is a short description of Australian farming:

“The introduction of a distinctly European agriculture in 1788 had a vast and extreme impact on the flora and fauna of Australia, with land-clearing, invasive species and foreign crop and livestock breeds degrading soil, water and vital ecosystem functions. Decades of continued land clearing and overgrazing coupled with industrialised farming methods have culminated into considerable challenges”.

In that context, does the Minister believe that, as chair of COP and, we hope, a responsible international actor, we should be encouraging more trade, particularly in beef and sheepmeat production, with Australia in those products, given their ecological and environmental climate damage? He referred to the impact assessment. Will it include a calculation of the carbon and ecological impacts of the trade deal?

Photo of Lord Grimstone of Boscobel Lord Grimstone of Boscobel The Minister of State, Department for International Trade, The Minister of State, Department for Business, Energy and Industrial Strategy

The noble Baroness always speaks with authority on these matters and I always listen to her carefully. I am happy to reassure her that trade does not have to come at the expense of the environment. Those two matters are not incompatible. I am pleased to report to noble Lords that we have worked with Australia to secure provisions on a wide range of environmental areas in this agreement, including preventing pollution from shipping and co-operating on addressing marine litter, including plastics and microplastics. We have committed to an environment chapter that will go above precedent, and both parties have confirmed commitments under multilateral environmental agreements, including the Paris Agreement. Noble Lords will see that in detail when the full agreement is available and the impact assessment will, of course, cover these matters. I hope that the noble Baroness will feel able to welcome that environmental chapter when she is able to see it in full.

Photo of Lord Balfe Lord Balfe Conservative

My Lords, the Statement refers to what the world will be like in 2030, 2040 and 2050. One reality is that China will play a much more significant part and that the Pacific area needs defenders of democracy. This agreement must be welcomed and we should seek agreements with democratic countries in the region and on joining the Trans-Pacific Partnership. Can the Minister assure us that the Government will redouble their efforts to get those agreements?

Photo of Lord Grimstone of Boscobel Lord Grimstone of Boscobel The Minister of State, Department for International Trade, The Minister of State, Department for Business, Energy and Industrial Strategy

I am very happy to give my noble friend a full assurance on those matters. As noble Lords will be aware, we applied to the Trans-Pacific Partnership as to whether we could commence negotiations. It was pleasing that, as a multilateral group, it came back very quickly. Those negotiations are now commencing and I look forward to bringing their results before the House in due course, and when I do so it will absolutely meet the point that my noble friend is asking about. We will see that it is yet another agreement reinforcing British interests and benefiting British businesses and consumers.

Photo of Baroness McIntosh of Pickering Baroness McIntosh of Pickering Conservative

I congratulate my noble friend on negotiating this agreement but, before we get too carried away, our existing trade with Australia is 0.5% of our total trade and the increase will be 0.02%. He said that high standards of food production that farmers and consumers in this country are delighted to support will not be compromised. However, the Government are going further in their pledge to this country to impose even higher standards, yet we are going to accept beef produced in Australia, which travels much greater distances, which must surely increase its carbon footprint while not meeting our high animal welfare standards. Will he accommodate the request from the outgoing chair of the Trade and Agriculture Commission that any trade agreement be presented to the incoming commission well before signature and at the earliest possible opportunity?

Photo of Lord Grimstone of Boscobel Lord Grimstone of Boscobel The Minister of State, Department for International Trade, The Minister of State, Department for Business, Energy and Industrial Strategy

I thank my noble friend for that. I indeed looked into the question of food miles before this debate. I was pleased and slightly surprised to find that Australian farming methods are less carbon-intensive than ours in certain instances. As that is the case—it is, of course, subject to further analysis—it will more than compensate for the food miles point that my noble friend raises. As I said, there will be full time for this agreement to be scrutinised by our new Trade and Agriculture Commission.

Photo of Baroness Pitkeathley Baroness Pitkeathley Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, with apologies to the noble Baroness, Lady Ritchie, we have reached the time limit of 20 minutes. We now move to our next business.