Don’t let narrow-minded protectionists squander our great Brexit opportunity
Brexit, on its own, does not add a farthing to our national wealth. Rather, it removes constraints, allowing us to make different choices. How we exercise those choices will determine whether we succeed. How are we doing so far? The story is mixed. Boris Johnson speaks movingly about “re-emerging after decades of hibernation as a campaigner for global free trade”. But the default setting of our administrative state is to stick, wherever possible, to the status quo, persisting with EU standards for their own sake, even though we no longer get any preferential market access in return. As a consequence, there is resistance even to a comprehensive trade deal with Australia.
Negotiations are supposed to conclude next month. Australia will be the first free trade agreement (FTA) that we have put together from scratch rather than adapting an existing EU deal. It should, in theory, be very straightforward. The UK and Oz have near-identical legal, political and accountancy systems, compatible qualifications and interoperable regulatory models. We share the same approach to animal welfare, food safety and labour law. Our wage levels are similar.
It should have been the work of a moment to agree to recognise each other’s goods, services and credentials; and, indeed, early signs were that the resulting FTA would be one of the most thorough in the world, covering investment, procurement, digital trade, financial services and, not least, freer movement. Australians understandably resented having to wait behind EU nationals to enter Britain. As a friend of mine, a senator from Victoria, likes to remind me: “There were no bloody queues at Gallipoli, mate.”
In many ways, a UK-Australia FTA is nothing more than a restoration of the natural order. Our trade was artificially diverted after 1972 by the phased imposition of EEC tariffs and standards. Undam the stream and it will return to its ancient bed. More than that, a deal will take Britain closer to membership of the Pacific trade nexus, the CPTPP, where most of the world’s growth is taking place.
Who could possibly oppose an ambitious trade deal with such a close ally? Several people, it turns out. First, those who dislike trade on principle, either on anti-capitalist grounds or because of the misplaced fad for self-sufficiency. Then those who have learned to make a living from the existing dispensation and are fretful about any change. Then some resentful Remainers who, consciously or unconsciously, can’t bear the thought of a post-EU Britain thriving. Finally, there is the force of sheer bureaucratic inertia – what Milton Friedman (on a visit to Australia, appropriately enough) called “the tyranny of the status quo”.
These groups have converged on the issue of agricultural protectionism. Their operatives are National Farmers’ Union officials, the Defra blob and a handful of Tory backwoodsmen. Their campaign organ seems to be the Mail on Sunday, which has become almost deranged in its hostility to imports.
Presenting themselves as champions of British agriculture makes tactical sense – we all want our farmers to prosper – but it is fundamentally dishonest. British farmers have a lot to gain from freer trade. The fastest-growing market for red meat is Asia which, a decade from now, will contain two thirds of the world’s middle class. Some 75 per cent of Australian beef exports go there, as against one per cent to Britain, and for good reason: Asian prices are higher. Asia should be the market our own farmers are eyeing: the British brand has immense prestige there.
Obviously a full trade deal would make it easier for Australian beef to enter the UK (and vice versa). But look at the numbers, for Heaven’s sake. We import around 250,000 tons of beef each year – 91 per cent of it from the EU and one per cent from Australia. Are we really going to give up on Global Britain because we want to carry on privileging Europe over Australia?
If we can’t do a proper trade deal even with our kinsmen Down Under, we might as well throw in the towel. Australia matches or surpasses the EU in its animal welfare standards. And – do I really need to spell this out? – its agricultural produce is counterseasonal to ours. Restricting such a deal would amount to an even more closed policy than the one forced on us by Brussels.
Nor, by the way, does the “food miles” argument hold water. Think of the size of a cargo ship, and ponder how minuscule is the share of its CO2 emissions taken up by a single portion of lamb or beef. The vast majority of carbon is accounted for during the farm phase – in heating, tractor fuel, fertilisers and so on. Australian and Kiwi farmers, partly because of economies of scale, are so efficient in this regard that they can get a chop to your plate with a lower carbon footprint than an equivalent chop from a Welsh hill farm.
Now don’t get me wrong, I love Welsh hill farms. This country is unusual in that its finest spaces are cultivated. Unlike most of our neighbours, we don’t place food production and natural beauty in separate mental categories. Our most gorgeous landscapes usually involve copses and hedgerows.
Outside the EU, Michael Gove took the opportunity to design a British farm policy that explicitly recognises the value of those landscapes, and rewards stewardship. It is that regime, rather than protectionism, that will preserve the glory of our countryside.
But we shouldn’t be satisfied with preservation. We should be winning new markets. Beef sells here for around half the price it fetches in Japan or South Korea. We think of these places as being closer to Australia and New Zealand than to Britain, but the distances are comparable. Rank-and-file farmers know it, even if their Euro-nostalgic spokesmen affect not to.
Regular readers will remember that, four years ago, I wanted a soft Brexit. Joining EFTA and matching some EU standards would, I argued, smooth our transition, making redundant the most objectionable parts of the Withdrawal Agreement and the Northern Ireland Protocol. I lost that argument. Britain chose to pay a high price in the talks for complete regulatory autonomy.
Fair enough. But it would be mad now not to make use of that autonomy. There were arguments for staying in the EU and there were arguments for leaving. There is no argument at all for abandoning the advantages of membership and then ignoring the opportunities of withdrawal.
National Farmers’ Union officials and the Defra blob are almost deranged in their hostility to imports