Source · Select Committees · Welsh Affairs Committee
Recommendation 17
17
Accepted
Ensure Free Trade Agreements do not undermine the viability of farming in Wales
Recommendation
We are concerned that Free Trade Agreements have been entered into in the full knowledge that Wales’ agricultural industry may be negatively impacted. The Government must ensure that FTAs do not act as a ‘Trojan Horse’ that, overtime, will undermine the viability of farming in Wales. Although Australia and New Zealand do not make full use of their existing Tariff Rate Quotas, there is no room for complacency here given the extent of the challenge increased international competition will pose to the industry in Wales. (Conclusion, Paragraph 90)
Government Response Summary
The government states it carefully monitors trade data and sees no evidence that FTAs with Australia and New Zealand have negatively impacted Welsh beef or lamb production, as imports are primarily displacing EU imports. It highlights existing safeguards within the agreements.
Government Response
Accepted
HM Government
Accepted
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.