UK-Australia trade deal unlikely to impact Welsh farmers in the short term, MPs say

The Welsh Affairs Committee has today delivered its initial verdict on the implications for Wales of the UK-Australia Free Trade Agreement (FTA). The Committee has called for the UK and Welsh governments to work with the agri-food sector to ensure that UK producers have the skills and support needed to thrive in a new global trading environment. This would include a significant increase in the number of Agriculture and Food counsellors based overseas.

The recommendation follows a short inquiry the Committee held to explore the implications for Wales and has offered its initial conclusions and recommendations to feed into the FTA which is due to be published at the end of 2021.

The Committee was reassured that in the short term, there is unlikely to be a significant impact on Welsh farmers due to tariff free imports of beef and sheep meat products. While under the FTA more of these imports will be tariff-free, this is unlikely to result in a competitive disadvantage for Wales short-term, as the Committee heard Australia has more profitable markets “closer to home”. However, the longer-term risks are unknown and the Committee urges the UK Government to set out the conditions which would need to be met for the agricultural safeguards for red meat imports to take effect.

While the Committee is satisfied with the level of engagement between the UK and Welsh Governments in the consultation phase, its report recommends that the draft treaty text is shared with the Welsh Government. This is to enable the Welsh Government to feedback the local and regional impacts, and to develop its own impact assessment covering the short-term impacts and impacts by sector. Furthermore, while the Committee welcomes the UK Government’s commitment to include the impact on Wales in the deal’s impact assessment, it reiterates the call made in its Brexit and Trade report for substantive Wales-specific impact assessments to be produced for this and future FTAs.

The Committee is also concerned that the statutory Trade and Agriculture Commission (TAC) – responsible for scrutinising any agreement in terms of animal welfare and environmental conditions – is not yet operational. The TAC should be established as soon as possible, and for future FTAs, the TAC’s report should be published alongside the final FTA.

Chair of the Welsh Affairs Committee, Rt Hon Stephen Crabb MP, said:

“Many will be looking to the deal struck between the UK and Australia to indicate what is to come with future FTAs, so it is crucial that the Government gets it right.

“On the whole, our Committee has been pleased with the level of communication between the UK and Welsh Governments as the FTA develops. However, as there are currently no plans for a Wales specific impact assessment, the impact of local and regional areas could be overlooked. We urge the UK Government to share the draft treaty text with the Welsh Government so this can be properly explored.

”Following Brexit, there is an enormous amount of uncertainty for Welsh farmers. We are reassured that in the short term, the UK-Australia FTA is unlikely to be damaging to Welsh farmers. However, it is clear that the UK and Welsh governments need to work with the sector to make sure that they can survive and thrive as part of our new trading arrangements and make the most of the opportunities that trade deals offer Welsh producers.”

Recommendations

The Welsh Affairs Committee’s recommendations are:

• The Welsh Government should have access to the draft treaty text prior to publication. This would enable the Welsh Government to provide feedback on regional and local impacts to inform the UK Government's impact assessment and to produce its own impact assessment.
• The UK Government should publish a Wales-specific impact assessment for free trade agreements (FTAs), including the UK-Australia FTA. This should provide more detail than the impact assessment for the UK-Japan Comprehensive Economic Partnership Agreement (CEPA) did, and include short-term impacts and impacts by sector in Wales.
• The UK Government should clarify what conditions would need to be met for agricultural safeguards to be applied in years 10-15 after the agreement comes into force. In response to this report, the UK Government should also explain how it intends to work with the Welsh Government to ensure that its wider trade strategy is coherent with ambitions to make farming more productive and sustainable.
• To improve scrutiny of future FTAs, the Trade and Agriculture Commission's report should be published alongside the final text, impact assessment and explanatory memorandum.
• On establishing the statutory TAC, the UK Government should publish a statement clearly outlining the role of the TAC and the role that the TAC will play in feeding into Parliamentary scrutiny of FTAs.
• The TAC must include at least one member who understands and has direct experience of the agricultural and regulatory landscape of Wales.
• However, in order to maximise opportunities for Welsh farmers to export their goods and access new markets, the UK should significantly increase the number of Agriculture and Food Counsellors based overseas, particularly in the Asia-Pacific and Middle East regions.

Notes to editors:

• The Welsh Affairs Committee has recently launched an inquiry into The economic and cultural impacts of trade and environmental policy on family farms in Wales which, among other issues, will consider the impact international trade policy is having on small farms in Wales.