THE PROPOSED trade deal which the British Government has negotiated with Australia has confirmed the worst fears many of us had about the trajectory of trade policy post-Brexit, writes Jonathan Edwards MP.
The drive to go for the hardest possible Brexit was more than toxic anti-Europeanism amongst fanatical right-wing British nationalists.
Despite the economic madness of their philosophical position, Brexit, for those leading the Johnson revolution was always about a puritan belief in free trade. In their world view, the European bloc was a literal block on the free movement of goods and commerce around the world.
What escapes them is that not everyone in the world competes on the same level playing field. For instance, if your policy priority is to produce goods at the highest possible standard for environmental or safety purposes, those making the goods require an element of protection from other parts of the world where the same standards do not apply.
Without protections, those producing goods domestically face unfair competition. As a result, under the rule of economic physics, one side, in this case, Australia, gets a better deal than the other side, the UK.
When it comes to agriculture, Australian farm units are massive when compared to the traditional Welsh family farm.
A beef business in Australia wouldn’t blink at over 10,000 cattle. Compare that to the statistics provided by Hybu Cig Cymru showing that in 2019, the total number of beef cows in Wales was 163,800, with an average herd size of 23.
Of equal concern, is that Welsh farmers produce food at a far higher standard, meaning higher costs. I do not want to appear flippant, but it does not seem to me that the British Government has a basic grasp of the fundamental aims of trade policy.
Trade analysts calculate that, in very simple terms, because of the deal with Australia, their trade exports to the UK will increase by 83.2%, whilst UK exports to Australia will only increase by 7.3%.
In addition, British economic output will only be boosted by 0.02% over 15 years, a minuscule amount.
Australian trade negotiators probably couldn’t believe the naivety of those at the opposite end of the Zoom calls.
The responsibility for this great betrayal falls directly at the feet of those politicians that have clearly misled those they seek to represent.
Brexit is quickly turning into a story of betrayals.
Firstly, it was the Northern Ireland unionists, then it was the fishing industry, and now farmers. The big question is who comes next?
Considering the British Government are proposing to remove whole swathes of safeguards for the steel industry, it appears our heavy industries and the vast associated supply chains are next in line.
The Australian trade deal sets a precedent, and not only for the agricultural sector.
Trade deals with far bigger economies than Australia, such as Brazil and the US, will undoubtedly be more problematic, not just for food but other sectors like steel and manufacturing.
The trade negotiators of these countries are probably licking their lips as the British Government concede an open-door policy for their exports.
Make no mistake, the British Government are pursuing a Hayekian experiment when it comes to international trade.
I remember a meeting a few years ago with the former Secretary of State, deep in the bowels of the new Department for International Trade building.
Both he and his senior civil servants genuinely believed that we were about to enter a global age of uniform tariffs and standards.
At the time, I was seen as being somewhat out of the club when I remarked that the real world, the one we live in, is one of large trading blocs, trade wars, and protectionism.
This leaves Wales in a difficult predicament.
Trade policy is being constructed in Westminster and we don’t have any sort of a say over policy, let alone the ability to protect our interests.
It is why, since Brexit, I have argued that this is one of the policy areas in which Wales must have a veto.
The message to the people of Wales is clear.
Westminster thinks nothing of undermining our key economic sectors and with it our jobs and livelihoods.
The current constitutional status renders the Welsh Government powerless.
There is only one answer. However, the question is do we have the courage to stand up to our Westminster overlords and say Yes to a genuine national future?
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