Should we buy from our Aussie friends, or from the hostile EU?
Report: Why the UK-Australia trade deal makes sense for Poms and Cobbers alike
© Facts4EU.Org 2021
A Facts4EU.Org summary showing the EU is a bigger threat than Australia
In recent weeks, negotiations conducted with their opposite numbers in Australia by UK International Trade Secretary Liz Truss and her team have come under intense and antagonistic pressure from vested interests in the UK. The arguments against a deal have mainly come from the (pro-EU) National Farmers Union, who claim that British farmers will suffer from an increase in Australian exports to the UK.
To put this debate into perspective, Facts4EU.Org has analysed the current trade in goods and services between the UK and Australia, and compares this to the dominant position held by the EU in its trade with the UK.
It seems the UK-Australia trade deal’s opponents feel it is acceptable to take vast imports from the EU under the one-sided EU-UK ‘Trade and Cooperation Agreement’, but not to take a much smaller number of imports from Australia under a new free trade agreement.
Photo: NFU President Minette Batters
How dominant is the EU in selling to the UK, compared to Australia?
Brexit Facts4EU.Org Summary
Imports of goods and services in 2020
- UK’s imports of goods and services from the EU27 : £293.9 billion
- UK’s imports of goods and services from Australia : £4.1 billion
© Brexit Facts4EU.Org - click to enlarge
- The EU27 accounted for 50.2% of all imports into the UK
- Australia accounted for just 0.7%
© Brexit Facts4EU.Org - click to enlarge
Just who do the National Farmers Union think they are competing with?
A cursory glance at the figures we have provided above (from the Office for National Statistics) show that Australia could increase its sales to the United Kingdom ten-fold, and still be dwarfed by the EU27’s sales to the UK by a factor of seven.
When it comes to agricultural products alone, the UK imports only 0.8% from Australia, and the EU27 countries remain the dominant suppliers by a long way. If Australia should be successful in exporting more food to the UK, British consumers will benefit by having a greater choice and lower prices, and EU suppliers are likely to be substituted.
The state-subsidised EU farming sector
If the NFU are truly concerned about competition, perhaps they might want to focus on the the massive subsidies which EU farmers still receive from the Common Agricultural Policy (CAP) and which in the UK’s case have been continued by DEFRA. UK farmers are still getting subsidies. The CAP I (basic payments) will be phased out by 2027. However the agri-environment subsidies will be increased, as farmers will be paid for environmental projects. The amounts have not been finalised but it could merely be a case of calling the same amount of subsidy by a different name.
The total for the EU's CAP over seven years, (the normal five years had to be extended to include the last two years, as EU countries could not agree), amounts to an astonishing subsidy of £327 billion. This is the largest single element in the EU’s vast budgeting framework.
By contrast, Australia’s farming industry had its subsidies removed years ago.
UK agriculture and fishing combined represent less than 0.5% of the UK economy
Both sectors have significance beyond mere economics, of course, but farming interests must be seen in the context of the overall trade between countries, which affect millions of people.
Reaping what we sow – the Brexit bonus
One fundamental aspect of the freedom to act as an independent country again is the ability to do trade deals around the world in the UK’s interests. This was something that was forbidden to the UK under the EU’s rules.
A trade deal with Australia is expected to deliver important bonuses. Not only could it provide some sectional templates for partial use with trade deals for certain other Commonwealth countries, it would also be an important stepping stone on the road to joining the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership). This would then open up markets for British exporters in the fastest-growing region in the world.
Photo: The Rt Hon Liz Truss MP, Sec of State for International Trade
The UK is now the sixth largest exporter of goods and services into Australia, with AUS$15.7bn of sales, behind Thailand in fifth place and Germany in fourth place. It would not take much effort to see the United Kingdom leapfrog both of these countries.
For decades the United Kingdom has played an important and liberalising role in international trade, which has led to substantial economic growth around the world. In recent times, despite being a founder member of GATT and the World Trade Organisation, the UK has been hidebound by the EU Commission who took over all trade negotiations from member countries, with disastrous consequences.
Free trade is good. Free trade works. The EU’s protectionism, insularity, and insistence on putting ideological diktats into trade agreements does not.
There are many further arguments and facts we could advance regarding this proposed UK trade deal with Australia, but as ever we wanted readers to have an overview. It seems that unreformed Remainers in organisations such as the NFU are still fighting a rearguard action, with no thought to where the threats to the UK’s growth and prosperity really stem from.
It is currently rumoured that the Prime Minister favours a UK-Australia trade deal which will be phased in over 15 years, to appease the highly vocal farm lobby. We urge the British Government to get this deal done and to phase in the farming element over only seven years. We are quite certain that support can be put in place for any parts of the farming sector which require it.
As our friends Down Under might say: “She’ll be alright, mate.”
The EU's hostility towards the UK
Our headline referred to the EU's hostility. This has been ably demonstrated by the EU's treatment of UK exporters, imposing absurd checks, whereas the EU's products continue to be waved through UK borders with minimal checking. The hostility stems in large part from the EU Commission who can never forgive the British people for voting to leave their empire.
Unfortunately the continued actions of the EU Commission - and of several countries at their individual borders - has begun to alienate even those of the UK public who voted Remain. We very much hope that the citizens and businesses in EU27 countries will start to exert pressure on the Commission and on their governments to act reasonably. If they don't, we suspect that EU products will become less and less in demand in the UK, replaced by cheaper, high quality products from further afield.
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[ Sources: UK Office for National Statistics (ONS) | Australian Department of Foreign Affairs and Trade (DFAT) | DEFRA | HMRC ] Politicians and journalists can contact us for details, as ever.
Brexit Facts4EU.Org, Wed 27 May 2021
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