Australia Free Trade Agreement — House of Lords, 2022-07-11
Topic: Foreign Trade
James Younger (Conservative, Centre-right): I do indeed and if my noble friend will allow me, I shall come to that. To continue my so-called peroration, the deal will increase trade with Australia by 53% and boost the economy by £2.3 billion. I take note of the rather negative view of the noble Baroness, Lady Liddell, and I will explain what the extra benefits of this deal are. It will enable the 15,900 businesses that already export goods to Australia to sell their products in ever greater quantities, while opening the door for thousands of other businesses to start their exporting journey. This means exciting new opportunities for Scotland’s world-renowned whisky distillers, Wales’s fintech companies and Northern Ireland’s leading medical and pharmaceutical firms, as well as the north-east’s car manufacturers and aerospace companies in the West Midlands My noble friend Lord Udny-Lister asked about the reach of this agreement—another good question. I shall just mention SMEs, because this deal will benefit businesses of all shapes and sizes, not least the UK’s SMEs—the backbone of Britain—which comprise more than 99% of all private sector businesses, employing 16.3 million people and generating £2.3 trillion of income I come to investment. The deal will unlock further investment potential between our two countries too, with UK investors able to benefit from broader and deeper market access than Australia has ever guaranteed in a previous trade agreement. This will allow us to build on the £37 billion already invested in Australia’s economy in 2020. Of course, there will also be benefits for UK consumers, who will be able to enjoy more of their favourite Australian products, such as Jacob’s Creek and Hardy’s wines or Tim Tam biscuits The subject of services was raised, not least by the noble Lord, Lord Liddle. I was pleased to read the comments of the IAC in its report, welcoming the provisions that have been secured. The services sector, as we know, is of huge importance to the UK, and we believe we have negotiated a deal that plays to these strengths. I say to the noble Lord, Lord Liddle, that Australia has gone further than ever before in granting access to its market in several areas, with unprecedented levels of regulatory transparency. UK services from architecture and law to financial services and shipping will be able to compete in Australia on a guaranteed equal footing. This could increase exports of UK services to Australia, which were worth £5.3 billion in 2021 The "Professional Services and Recognition of Professional Qualifications" chapter will support work towards mutual recognition of professional qualifications. This could lead to professionals such as lawyers, engineers and accountants no longer having to requalify to practice in one another’s countries. On mobility, the noble Lord, Lord Liddle, is right; this is a good part of the agreement, whereby there is a way in which our people can have good movement between one another’s countries. For the first time, UK service suppliers, including architects, scientists, researchers, lawyers and accountants, will have access to visas to work in Australia without being subject to its changing skilled occupation list I also acknowledge the point made by the noble Lord, Lord Bilimoria, about innovation. This agreement contains the world’s first dedicated innovation chapter, underlining the important role that innovation will play in the future. We want to take full advantage of this, particularly in terms of technological developments On agriculture, which I definitely want to come on to, the committee noted the concerns of the farming community, specifically that the agreement may lead to potential surges in agricultural imports to the UK. I want to provide some reassurance. We have secured a range of measures to safeguard our farmers, including tariff rate quotas for a number of sensitive agricultural products; product-specific safeguards for beef and sheepmeat, which were raised today in the debate; and a general bilateral safeguard mechanism providing a temporary safety net for all products. As the noble Baroness, Lady Hayter, said, we should remember that Australia’s focus is on exporting to lucrative markets in the Asia-Pacific region, and it is relatively unlikely that beef and sheep would be diverted to the UK from Asian markets in very large volumes, although I note the slightly pessimistic view of the noble Baroness, Lady Liddell Finally, answering the points made by my noble friend Lord Robathan, our estimates suggest a reduction in gross output of around 3% for beef and 5% for sheepmeat as a result of liberalisation, relative to the baseline. These estimated impacts would be felt gradually over the staging period. It is likely that the increase in imports will primarily displace beef imports from the EU and sheepmeat imports from New Zealand. Further testing suggests that, given the strong consumer preference for UK meat, gross output could fall by as little as 1% in beef and 2% in sheep The environment was raised by the noble Lords, Lord Oates and Lord Kerr, and the noble Baroness, Lady Liddell. I note the disappointment expressed but, to come back to noble Lords on this, we have secured the most substantive climate provisions that Australia has ever committed to in an FTA. The deal also recognises our right to regulate to reach net zero and affirms our mutual international environment and climate commitments, including the Paris agreement. There is a lot more I could say about that, but I want to move on and finish—