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The greatest (trade) show in town?


By George Esmond

Like a West End director, Prime Minister Boris Johnson gave his expectant backbenchers, cabinet colleagues, Australian counterparts, and the rest of the world a clear indication of Global Britain’s trading tune.

“We are the party of Peel” exclaimed the Prime Minister, his reference to 19th Century Prime Minister Sir Robert Peel’s resignation over the Corn Laws (which imposed tariffs on imported foods), setting the scene to push the UK into an era of true free-trade farming.

While likely to go unnoticed by the general public, such a shift policy will have a profound impact over the next decade. At present, Australia pays 20 per cent tariffs on all exports of beef to the UK. The approach taken by the Secretary of State for International Trade, Liz Truss, and supported by the Prime Minister, however, would see tariffs phased out over 15 years to zero, in line with the terms for the EU. Australian imports would also have to meet the UK’s animal welfare and food safety standards.

The move has caused a farming furore that has Boris’ cabinet at odds with one another in a more public way than we’ve seen so far in Johnson’s tenure. Both Georges Eustice, the Environment Secretary, and Michael Gove, the Minister for the Cabinet Office, have warned of political backlash from Scotland and Wales where hill farms will be hard-hit by trade from the zero-tariff deal.  The row offers a prescient insight into the trial and tribulations that are yet to unfold.

What happens with an Australian trade deal is important for several reasons. It won’t just reveal how serious this country is about free trade but foreshadows where Britain’s loyalties lie, what its priorities are and which voters it is willing to risk losing ahead of future elections.

Firstly, a free trade deal with Australia is, while economically insignificant, a meaningful vote of confidence in Britain’s democratic ally. Australia has been one of China’s fiercest critics recently, calling for an inquiry into the origin of the coronavirus. Beijing reacted angrily by imposing tariffs on Australian barley and wine for the next five years while barring most Australian timber and beef from the country. A strong trade deal with Australia would therefore help promote democratic solidarity against Beijing but could risk burning further bridges with the East’s economic powerhouse.

However, the prospect of Boris Johnson’s government – which has made tackling the climate emergency a key priority – racking up thousands of air miles a day to deliver cheaper beef to its customers is hardly a coherent narrative. As has been seen on numerous occasions, the preference to break long-term promises for short-term goals, this time, however, might be a step too far.

Ever the retail politician, Johnson’s remarks ultimately choose consumers over producers. It casts aside farming groups in traditional Conservative seats who said the deal would set a dangerous precedent for future trade deals and could result in British farmers struggling to compete with cheap imports. The move will do nothing to quash green shoots in Conservative heartlands who are starting to believe the smaller parties care more about the local communities and localism than the Conservative Party.

The Australia debacle represents a dress rehearsal. Soon Britain’s curtain will fall, and the opening night reviews will be in. We are yet to know if it will be a West End hit or America will be waiting in the wings and using the deal as leverage to take Britain off-Broadway when the two sides meet to discuss a future free trade deal.