Brexit, Australia trade deal: Ian McConnell: High time Tories did level with the public

It was not of course that big a surprise – the deal is after all surely likely to attract criticism from anyone who takes the time to assess it objectively. However, the House of Commons’ International Trade Committee certainly pulled no punches when delivering its view of the deal in a report last week.

The committee warned the UK Government against “overselling the benefits of trade deals” as it called for “a full assessment of the winners and losers across all economic sectors and nations of the UK”.

Particularly notable was the declaration from committee chairman and Scottish National Party MP Angus Brendan MacNeil, as the report was published, that the UK Government “must level with the public”.

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He added: “This trade deal will not have the transformative effects ministers would like to claim. The Government’s own impact assessment shows an increase in GDP (gross domestic product) of just 0.08 per cent as a result of the deal, and the balance of gains and losses varies between economic sectors and nations of the UK.

“We have also found multiple examples where the Government’s flat-footed negotiating has led to significant concessions being given to the Australians without securing all possible benefits in return.”

It is a very different view indeed from that set out by the Johnson administration when the deal was unveiled last summer.

The Prime Minister declared back then: “Today marks a new dawn in the UK’s relationship with Australia, underpinned by our shared history and common values. Our new free trade agreement opens fantastic opportunities for British businesses and consumers, as well as young people wanting the chance to work and live on the other side of the world.”

He added: “This is global Britain at its best – looking outwards and striking deals that deepen our alliances and help ensure every part of the country builds back better from the pandemic.”

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It was, given the political backdrop, no surprise to hear Mr Johnson and his Cabinet colleagues celebrating the Australia free trade deal so enthusiastically, especially given their complete (and continuing) lack of success in showing any meaningful benefits of Brexit as the damage from their folly racks up.

The UK Government has made much of the Commonwealth, so the Australia deal was presumably right up its street.

However, if anyone wishes to form an objective view on whether they should attach more credence to the International Trade Committee’s report last week on the deal with Australia or to what Mr Johnson said in the summer of 2021, the paltry 0.08% addition to annual GDP foreseen by the UK Government surely provides the answer.

And, if further context is needed, people can always compare this tiny benefit with the Brexit losses.

The Theresa May government’s forecasts, published in November 2018, showed Brexit would, with an average free trade deal with the European Union, result in UK GDP in 15 years’ time being 4.9% lower than if the country had stayed in the bloc if there were no change to migration arrangements. Or 6.7% worse on the basis of zero net inflow of workers from European Economic Area countries. There has been a dramatic clampdown on immigration on Mr Johnson’s watch.

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The International Trade Committee last week declared “the Government has failed to secure protection for the names of iconic UK food and drink exports, such as Melton Mowbray pork pies, Scotch whisky, Welsh lamb and Irish cream liqueur” in the Australia free trade deal.

Setting out the opinions of its members, it added: “As a result, it remains legal in Australia to impersonate these products. With such large concessions being given to Australian agricultural imports, the MPs argue this protection for UK exports should have been an easy win.”

The committee pointed out that “lifting almost all tariffs…on agricultural imports is a significant change, and potentially sets an important precedent for deals with major food-exporting nations”.

It observed: “While the Government has sought to cushion negative impacts on the UK agriculture sector with phase-in arrangements, the committee notes farmers’ concerns that these protections are not adequate.”

And it warned: “While tariff reductions on processed food and drink may benefit consumers, they are unlikely to make a noticeable difference at supermarket checkouts. Products such as Australian wines could become cheaper by just a few pence.”

Hammering home its members’ views, the committee added: “The MPs express disappointment that tariff-free Australian food will not be required to meet core UK food production standards, for example regarding pesticide use.”

Noting concerns among farmers that this could lead to unfair competition, it called on the Government to “outline how it will monitor this and what it will do in response”.

Seemingly issuing a report card on the deal along the lines that the Government should have done much better, Mr MacNeil said: “The Government has increased access for food produced to lower standards than would be legal in the UK, yet did not secure geographical protections for iconic British goods, such as Melton Mowbray pork pies or Scotch whisky…

“As the first wholly new trade deal since Brexit, this agreement sets a precedent for the future. It is vital that the Government learns from this experience and negotiates harder next time around to maximise gains and minimise losses for all economic sectors and parts of the UK.”

The committee’s report includes reference to specific concerns in Scotland around the deal.

It declares: “The Scottish Government told us that ‘the issue of an enforceable definition for Scotch whisky in Australia is important to the whisky industry in Scotland, so it is unfortunate that the UK Government was not able to secure a commitment within this agreement’.”

The report adds: “The Scottish Government noted that it had written to the Government to express concern at ‘the implications of this agreement on farming communities in Scotland’.”

These worries over the impact of the deal on farming communities were voiced loudly, by the Scottish Government and many others, before the agreement was finalised.

However, as with other sensible points made amid the ideological Brexit frenzy, these representations seemed to be ignored by the Johnson administration, which appeared desperate to do a deal at any cost.

It is high time this ideologically driven UK Government, which has had a nightmare as it has failed spectacularly but predictably to deliver on its big talk about the post-Brexit future, did level with the public and stop overselling its trade deals.