Source · Select Committees · Welsh Affairs Committee
Recommendation 16
16
Rejected
Australia and New Zealand FTAs disproportionately disadvantage Welsh agricultural sector
Conclusion
The UK’s Free Trade Agreements (FTA) with Australia and New Zealand will disproportionately disadvantage the agricultural sector in Wales. Beef and sheep meat make up a significantly larger share of the agricultural sector in Wales compared to England. As a result, Wales is more exposed 42 to the potential impact of imports from Australia and New Zealand under these trade agreements. We are concerned that, as these imports increase yearly, Welsh beef and lamb producers will face greater competition from Australian and New Zealand imports and may struggle to remain competitive. (Conclusion, Paragraph 89)
Government Response Summary
The government rejects the committee's concern, stating there is no evidence that the FTAs have impacted Welsh beef or lamb production, as quotas have not been fully utilised and imports are primarily displacing other imports. They also highlight existing safeguard mechanisms within the agreements.
Government Response
Rejected
HM Government
Rejected
Defra carefully monitors trade data, including the usage of the quotas under the trade agreements with Australia and New Zealand. There is no evidence that the Trade Agreements with Australia and New Zealand have had an impact on Welsh beef or lamb production. The quotas for beef and lamb have not been fully utilised since the agreements came into force, although imports of Australian beef and lamb, and New Zealand beef have risen under the agreement. Government analysis, and preliminary trade data, suggests that these imports from Australia and New Zealand are primarily displacing other imports—mainly from the EU—more than impacting on domestic UK production. UK cattle prices continue their strong performance, which suggests these imports are not having a significant impact on the domestic market. It also remains the case that the majority of Australian and New Zealand meat is destined for other markets, especially in Asia, which are closer geographically and have growing demand for red meat. The Free Trade Agreements with Australia and New Zealand include several safeguards. In addition to the quota volumes for beef and lamb in years 1–10 of the agreement, there is a product specific safeguard for those products in years 10–15 of the agreement as well as a general bilateral safeguard mechanism, which provides a temporary safety net for industry if they face serious injury, or threat thereof, from increased imports as a direct consequence of the FTA.