Is the government’s new trade pact with Australia a good one?
It will soon go into effect and is the first agreement reached since the UK left the EU.
The International Trade Secretary, Kemi Badenoch, called it “fantastic” and predicted it would boost British exports by £2.3 billion.
The government has been criticized for “giving away our market too cheaply” by farmers and other critics.
I visited two small businesses to see how they were evaluating the controversial trade pact to determine whether trading after Brexit would be advantageous.
Both are located in Gloucestershire, the same county.
The engineer wants to increase his Australian exports from £100,000 to £1,000,000 annually.
The beef farmer is concerned that “we will all pay the price” because “this deal was done in a hurry.”
So what exactly is “The Deal Down Under” all about?
The magnetism of Mark Stewart is evident on the golf field. He didn’t use a driver or putter; instead, he used his trolleys.
With his technology, there’s no need to move your clubs around.
Instead, like a robotic caddy, his trolley will follow golfers throughout the fairway wherever they go.
The carts are not inexpensive; they cost about £1,500 each.
Global golfers will, however, pay for the newest high-tech equipment, which Mr. Stewart offers in 28 nations.
“Australia is great for us,” he says.
There is year-round golfing in this sporty, outdoor culture. Additionally, they enjoy having nice gear to boast about.
Australian sales for Stewart Golf last year were above £10,000. However, each sale came with a 5% import duty and complicated customs procedures. That will be eliminated once the new UK-Australia Trade Deal is implemented.
He smiles, “Either way, we’ll sell more goods.
“To be really honest, it’s not dramatic. We move from 5% to nothing, so it doesn’t completely impact the game, but it is undoubtedly helpful.
James Monk, a specialist in international trade, is found on the third green. His Business West team assists small businesses with tariffs and customs documents while advising them on the challenges of international trade.
I wonder if the new accord is significant.
Through the politics, he smiles, “It’s not, no.
“This trade agreement is hardly the best one ever. There is a 5% save roughly. Currently, a business can see that level of fluctuation in exchange rates or shipping costs, but it is yet another factor making the West country’s goods more competitive there.
All trade agreements have two sides.
And while selling Gloucestershire golf trolleys in Melbourne will be simpler, shipping sirloin steaks from Sydney to Southampton will also be less complicated.
Just ask a West country beef farmer for the bad news about the Deal Down Under.
David Barton is accustomed to bargaining for a discount, whether it’s in a supermarket’s carpeted offices or a livestock market.
He finds the UK government’s assistance to Australian farmers to be unbelievable.
He claimed, “They pretty much just gave it away.”
They granted us unassisted access to our market.
He has, if you will, a problem with Australian beef agricultural regulations.
Large “feed lots” can accommodate 50,000 cattle.
“The general public wouldn’t want it here, and neither would we,”
Antibiotics are used to prevent illness, not only treat it, and hormones are utilized to speed up beef cattle’s growth.
According to Australian officials, no hormones will be present in the cattle sent to the UK.
“How can we tell?” Mr. Barton queries.
Furthermore, the farm has already benefited from hormone use’s efficiency, so there is still unfair competition.
His worries are shared by others.
Minette Batters, president National Farmers’ Union and a farmer in Wiltshire, has also made statements.
“This agreement opens up UK agricultural markets options for Australian produce, regardless of whether or not they were produced to same environmental & climate-friendly standards that are expected of UK farmers,” she said.
Even George Eustice, the former secretary of the environment, has criticized the way the government does deals.
He stated before the House of Commons during a recent debate that “overall, the UK gave away far too much for far too little in return.”
The trade secretary, Kemi Badenoch, responded by saying she totally disagreed with everything he said.
She told the foreign trade committee, “We’re already talking it down, and the deal isn’t even in place yet.
Cool heads are counting the steaks away from politics.
It’s a long way to Australia.
The UK is a desirable market since it pays far more on premium beef than most other nations. Thus, only premium cuts will be transported there.
The impact of Sydney steaks on British beef market has been calculated by analysts at the Agriculture and Horticulture Development Board. According to their projections, Australian beef sales to the UK will climb by more than 260% annually to nearly 12,000 tonnes.
However, British beef farmers produce that much in a single week; therefore, analysts predict a “negligible” impact on UK beef prices.
According to a government official, “It is highly unlikely that large volumes of beef will be diverted to the UK.” Last year, 70% of Australian sheep and beef exports went to the Asia-Pacific region.
Overall, according to government economists, the new trade agreement will increase British exports by around £2.3 billion. Although it seems like a substantial figure, it actually amounts to less than 0.1% of the UK’s overall GDP.
However, as the first agreement reached by the government following Brexit, it is being closely scrutinized for indications of upcoming trade agreements. The stakes in this new arrangement are, therefore, very high even though the numbers are minor.
