Brexit: Who will Boris Johnson back in the ‘ferocious’ Australian trade deal row?

Will the prime minister side with British farmers, or will he opt for tariff-free imports of produce, described as a ‘complete betrayal’? Sean O’Grady considers the options

Will Boris Johnson side with British farmers? (AFP via Getty Images)

The cabinet row about the putative UK-Australia free trade deal goes far beyond its relatively modest macro-economic impact and right to the heart of the whole notion of what “global Britain” is supposed to be about.

On the one hand, representing the hard-pressed British consumer, we find Liz Truss, secretary of state for international trade, who negotiated the draft deal. She wants tariff-free access to the UK for Australian goods, notably wheat, lamb and other foodstuffs, just as the EU enjoys, but cabinet colleagues are concerned about what such a deal would mean for British farmers – a double whammy, given some are already losing ground in EU markets.

For Ms Truss, it is more than a matter of pride and the cost of groceries. It is the first post-Brexit deal that is much more than a rollover of an EU deal, and with a historic partner with close ties to Britain. As Daniel – now Lord – Hannan, a prominent Eurosceptic, commented: “If we can’t do a proper trade deal even with our kinsmen Down Under, we might as well throw in the towel”. He accuses “National Farmers’ Union officials, the Defra blob and a handful of Tory backwoodsmen” of trying to preserve the current subsidised regime of protection, inherited from the EU, with taxes on commodities from Australia and other revived trading partners. In his words: “If these deals with Australia and New Zealand don’t get done because of domestic opposition, that pretty much says the UK is not doing anything with global Britain. Because if we can’t do these, well, in truth, everything gets more difficult from here.”

In the other corner, we find the farmers’ friends, the current Defra secretary, George Eustice, and his predecessor, Michael Gove. For them, promises have been made to the farmers on safeguards and subsidies, and the rural vote is both faithfully Tory and pro-Brexit. Even though the character of the Tory party has shifted in recent years towards the poorer, urban vote, the party has traditionally been protectionist and infused with a bucolic vision of its mission.

Ms Truss will probably need the assistance of the prime minister if she wants to prevail. She will remind him that the Australian deal is in effect a prototype for the much more politically and economically significant deal with the United States.

Mr Eustice and Mr Gove will remind him, if needed, of the loyalty of the countryside to his party, and widespread public concerns about genetically modified produce, growth hormones and animal-welfare standards. The notorious chlorinated chicken is coming home to roost.

The EU’s reaction would also play a role, if they chose to, say, ban British food exports made with GM ingredients (and it would also imply tougher checks at the Northern Ireland border).

Ideally, as ever, Boris Johnson would like to have his cake and eat it (GM or otherwise) and will hope a compromise can be arrived at before the G7 summit in Cornwall next month. The Australian prime minister, Scott Morrison, has been invited over especially to parade the pioneering new UK-Australia deal. But the Aussies are famously tough bargainers.

The arguments in cabinet are complicated and “ferocious”, according to those in the know, because so much is at stake. One of the few indisputable benefits of Brexit was that it would enable Britain to “shop the world” for the cheapest sources of all sorts of things, not least food.

It is, indeed, the oldest of the arguments for free trade, going back to Britain’s emergence as a world industrial power no longer dependent for a living on agriculture: to feed a growing urban workforce cheaply (thus keeping wages down), major new sources of food from the rest of the world including the Empire were exploited, in exchange for produce made in Britain. It was a pattern of trade that came to an end when Britain joined Europe in 1973, and cheap wheat, butter, lamb and sugar from Canada, New Zealand, Australia and the Caribbean were supplanted by much less efficiently produced and more costly, alternatives from Europe.

Now comes the opportunity to restore such traditional arrangements and to add new ones from the Commonwealth, to enjoy excellent wines from the Cape and use more Indian software engineers to strengthen Britain’s high-tech sectors. Brexit, it was perhaps not often understood in 2016 and after, means change.

It would be strange indeed if the UK decided to open up its agricultural markets to the world, but also opted to continue to pay relatively inefficient British farmers to carry on as they always had, or reinvent them as very well rewarded environmental custodians, rewilding some of the countryside that has been cultivated for centuries.

The poor, in particular, and families in deprived areas would see no benefit in lower food bills resulting from their vote for Brexit, and would continue to pay taxes to support agricultural communities – from the challenged hill farmers of Wales and Cumbria to the dairy herders of the Midlands and the wealthy grain barons of East Anglia. It is has to be remembered that, like fishing, agriculture represents only a small proportion of the British economy and its population. Urban consumers are a much more powerful interest group, if less vocal. Soon the farmers will find out whose side the government is on.