Australians want to export their excellent produce at a price that will make British shoppers better off. By the same token, it must therefore make British farmers worse off
How wonderful it is that Ian “Beef Quota” Botham is to be the United Kingdom’s trade envoy to the Commonwealth of Australia. He’s known well down there – if not loved – and he even has some Antipodean trade experience himself, lending his storied name to a line of wines from southeast Australia. The Botham wine marketing material describes Lord Botham, as we must now learn to call him, as “arguably” one of the greatest cricketers that England has ever produced. Who can argue with that?
But is he one of the greatest trade negotiators England has ever produced? He might be but it’s probable that the day-to-day business of grinding through detailed tariff schedules and annual quotas will be delegated to people who probably would never win the Ashes but who know a thing or two about the laws of comparative advantage. The Australians understand such things and are legendarily tough and skilled trade negotiators. The British, not so much, as we all know by now. That’s the trouble.
The plain fact is that the Australians want to export their excellent produce at a price that will make British shoppers better off. By the same token, it must therefore make British farmers worse off. The laws of economics suggest that these farmers should relocate and retrain as bankers or something. But that of course is offensive as well as impractical. They would be unemployed or at best making a living from B&Bs or farm shops and flogging boutique products, with some public subsidy thrown in for rewilding and looking after red squirrels and the like.
Maybe there’ll be a long transition period, but the demise of the family farm will be preordained by such trade deals. The National Farmers Union says farmers would be thrown under a bus. Mark Drakeford, first minister of Wales, rightly asks: “How can our hill farmers compete with the Australian climate? How can our hill farmers compete with the space that is available for the huge farms that they have in Australia?” In Scotland they fear Australian precedents will be set for new deals with America, New Zealand, South Africa and the rest of the world where the climate and the land are better suited to growing crops and rearing livestock. There will be an agricultural depression not seen since the 1930s.
That’s the reason why a UK-Australia trade deal (apart from carrying over EU arrangements) hasn’t been concluded yet. It’s not just that we’ve all been a bit busy with the pandemic. It’s because allowing free trade in Australian produce would destroy significant sections of British agriculture.
It was always a bit of a mystery to some of us as to why, back in 2016, when we found ourselves in the countryside there would be huge hoardings up in fields for Vote Leave and later urging us to “Vote Tory” and to “Get Brexit Done”. It was always true, and regretful, that the EU was a protectionist bloc aimed at looking after farmers. Why would farmers wish to change that? Maybe they thought the subsidies would continue, as would the tariffs, and the Conservatives would look after them.
Global Britain is supposed to be about cheaper food (and everything else) to ease the cost of living. The Conservatives could cut food bills at a stroke if they just went for free trade, yet they seem reluctant, caught between loyalty to Brexit ideals and the farming lobby.
I’ve not mentioned animal welfare and food standards for the simple reason that they’re a bit of a bogus argument, an excuse for protectionism. Even if the Australians agreed to change their laws and adopt UK-standards, or equivalent, at least for their exports, then they’d still possess huge competitive advantages, such as the weather and economies of scale.
But let’s examine the standards and welfare argument more closely. Why, on the other hand, shouldn’t the Australians argue that the UK must change its laws instead, if it wants a level playing field? Should we maybe try to agree mutual standards? It is curious that this is the sort of thing we sullenly resent the EU trying to negotiate with the UK, and yet in a bilateral UK-Australian trade deal between two independent friendly nations, such mutual intrusions on sovereignty are thought perfectly acceptable. At any rate, the Australian deal isn’t worth much to them if their produce is banned from the UK because we don’t like genetically modified beef or wheat, pigs kept in pens, sheep mutilated, battery hens and all the rest of it. There’s not much left except Vegemite sandwiches.
The Conservative manifesto pledged we wouldn’t lower our standards for a trade deal, and we won’t; but Ian Botham and Liz Truss won’t be asking the Australians to raise theirs, because they can’t.
No doubt some sort of deal will be cobbled together, but it will be marginal and often trivial – chocolate bars and the like. The Australians are at a slight disadvantage at the moment because the Chinese are giving them the cold shoulder because of politics, and a new market, even a minor one such as the UK, would be handy. But even if the deal was much more comprehensive than seems likely, and even if it were followed by similar triumphs with, say, America and India (who also play hardball at trade), it would be dwarfed by the loss of easy access to European markets (and Northern Ireland) currently in train.
A nice bottle of Botham brand Malbec will be a couple of quid cheaper though. Howzat?