Don’t oversell benefits of post-Brexit trade deals, DIT warned

MPs criticise "failure to maximise gains and minimise losses" in landmark Australia agreement
MPs said negotiators had failed to secure geographical protections for "iconic British goods" like Scotch. Photo: alh1/Flickr/CC BY-ND 2.0

By Tevye Markson

08 Jul 2022

MPs have warned the government not to oversell the benefits of its trade deals in a scathing report on the UK’s agreement with Australia.

The warning came in a report this week from parliament's International Trade Committee, which accused the government of failing to get the best out from the government’s post-Brexit trade deal with Australia.

Committee chair Angus Brendan MacNeil said the government “must level with the public – this trade deal will not have the transformative effects ministers would like to claim”.

Then-trade secretary Liz Truss called the deal a “win-win” when it was agreed in June last year but the committee warned the government to "beware of overselling trade agreements" and said it should "communicate a realistic assessment of potential winners and losers".

Pointing out that the government’s impact assessment shows an expectation that the deal will increase GDP by just 0.08%, MacNeil urged the government to improve its negotiating in future deals.

“As the first wholly new trade deal since Brexit, this agreement sets a precedent for the future,” he said.

“It is vital that the government learns from this experience and negotiates harder next time around to maximise gains and minimise losses for all economic sectors and parts of the UK.”

The report, which gives the ITC’s verdict on the UK’s first from-scratch trade deal since leaving the EU, criticises UK government negotiators’ for failing to “maximise gains and minimise losses”.

MacNeil said the committee “found multiple examples where the government’s flat-footed negotiating has led to significant concessions being given to the Australians without securing all possible benefits in return”.

He said the the government had, for example, “increased access for food produced to lower standards than would be legal in the UK, yet did not secure geographical protections for iconic British goods, such as Melton Mowbray pork pies or Scotch whisky”.

“This means there is nothing preventing UK goods from being impersonated ‘down under’”, MacNeil said.

The committee said this was “an example of the government failing to secure an obvious benefit in exchange for the extensive concessions it has given on liberalising agri-food imports”. 

A Department for International Trade spokesperson said this criticism "fundamentally misunderstands the fact that Australia does not currently have a geographical indications scheme for agricultural products, foodstuffs or spirits."

The department said both countries have agreed to review the trade deal if Australia sets up a geographical protection scheme, calling this "the strongest commitment that Australia has made towards setting up a GI scheme in any of its trade deals". 

The report also warned of that the concessions offered to Australia could give an unfair advantage, impacting on UK farmers, and raised concern about the precedent the deal sets for future agreements with major food-exporting nations.

Responding, DIT pointed to the Trade and Agriculture Commission's independent report into the trade deal, published in April, which said there was no evidence that the deal would  undermine the UK’s domestic protections or put UK farmers at an advantage.

A DIT spokesperson said the "landmark trade agreement with Australia will unlock £10.4bn of additional bilateral trade, support economic growth in every part of the UK and deliver for the 15,300 businesses already exporting goods to Australia".

The department also rejected the idea that a single trade deal could set a blueprint for future deals.

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