Economic modelling in the UK says the likelihood of Australian produce flooding UK markets is low in the short term
Anxious farmers in the United Kingdom have been reassured Australian farm products won’t immediately flood their markets with the coming free trade deal.
Economic modelling in the UK says the likelihood of Australian produce flooding UK markets is low in the short term.
A “Horizon” report from independent researcher Strategic Insight predicts Australian exporters would focus on more lucrative and rapidly expanding markets closer to home.
Tariffs on red meat, wine, sugar and dairy will fall over the coming years with the UK-Australia free-trade agreement announced in June.
Once the deal is officially ratified, 99 per cent of Australian goods can enter the UK duty free.
The UK’s high-income market was seen to be an attractive destination for Australian lamb although Aussie beef was expected to stay with its present markets “if the world remains constant”.
UK farmers have been pushing back on the terms of the post-Brexit deal, arguing they struggle to compete with countries which don’t have the same high animal welfare and environmental standards as they do.
The mooted winding back of lucrative government subsidies paid to UK farmers under its Basic Payment Scheme also worries them.
Many UK farmers are currently able to remain profitable due to financial support from government in the form of BPS and other financial incentives, the report found.
Trade deals are by nature long term, and the UK industry will need to adapt to compete in a more global setting, Strategic Insight head David Swales said. Australia might be the first new trade deal the UK has negotiated, but it certainly won’t be the last.
The UK report said Australia was a big player in world markets compared with the UK, particularly for beef and lamb.
Australia has cost of production advantages over the UK in many agricultural commodities, particularly in livestock, the report states. They are used to producing to different standards to meet different export market specifications.
The report analysed Australian agricultural production and trade, assessing its potential competitiveness in the UK marketplace.
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