THE UK is in danger of a “race to the bottom” with a controversial post-Brexit trade deal with Australia, which could result in a boost to the SNP, according to an expert.
The proposals for a zero-tariff and zero-quota trade deal has sparked a furious backlash from farmers, who fear they will be undercut by cheap Australian beef and lamb imports which will drive them out of business.
Concerns have also been raised it will lead to Australian hormone-treated beef – which is banned in the EU – becoming available on shop shelves.
The deal has been hailed by UK ministers as a “major prize” for the UK’s newly independent trade policy.
But Professor Alex de Ruyter, director of Birmingham City’s University Centre for Brexit Studies, who is originally from Australia – said the gains to the UK are likely to be very small.
He said: “If you talk about things like manufacturing, the tariff regime in Australia on manufacturers are trivial to non-existent.
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“So I don’t really expect any windfall for UK manufacturers anyway for obvious reasons, because companies tend to produce and sell in the regions they are based.
“That is one of the ironies of Brexit - there was a good reason why half of our trade was with the EU, because geography matters.
“Australia is actually very strong in the sectors the UK thinks it has an edge in. We have the big four banks in this country, so does Australia.
“If you think of a local example in Scotland, the Clydesdale Bank was owned by the National Australia Bank until recently. I don’t really expect any windfall there for the UK financial services, as otherwise they would be there already.”
De Ruyter pointed out the UK Government’s own analysis had predicted a “paltry” 0.025% growth in UK GDP over the next 15 years.
He added: “The significance of this trade deal is not so much in terms of the deal itself – with a relatively small trading partner which only accounts for 2% of UK trade to begin with.
“The significance in the eyes of the UK Government will be the political optics – they can sell that to their Brexit core constituency, but the actual significance will be in terms of what they give away.
“Once you start letting in hormone treated beef, what next? When you then turn up to have to start to deal with a serious trade partner like the US, everything is on the table.”
UK ministers are aiming to have the trade deal signed before the G7 summit in Cornwall on 11 June.
Last week Nicola Sturgeon said she felt Scotland was being “shut out” of a potential deal with Canberra.
The First Minister also said the deal would be a “betrayal” of British farmers, adding that food imports must meet the standards of production in Scotland.
In response the Department of International Trade denied this accusation, claiming engagement is “taking place with all parts of the UK at all levels”.
A spokeswoman added: “Trade ministers have been discussing this with Scottish ministers throughout the process, most recently this week, and will continue to do so as we move forward in the negotiations.
“Any deal we sign will include protections for the agriculture industry and will not undercut UK farmers or compromise our high standards.”
But a spokesman for the First Minister said: “Simply telling the Scottish Government and other devolved administrations what UK ministers have already decided unilaterally doesn’t qualify as engagement in any meaningful sense.”
De Ruyter said: “I think we are in a danger of a race to the bottom.
“That is going to cause particular problems for the devolved administrations through the form of the Internal Market Bill that we have seen.
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“Trade agreements are the preserve of the UK Government yet health, for example, is a devolved power.
“I would be interested to see what happens if the UK Government negotiates a trade deal which gives, for arguments sake, American drug companies the right to charge higher prices to health boards. When the functional responsibility for that health board in Glasgow is with the Scottish Government, if they say no what happens then? You then end up with a situation where the UK Government might try and retract that power – it would be one of those things you would see going to the Supreme Court.”
De Ruyter said the potential impact on farming communities could provide another opportunity for the SNP to attack Westminster as being “out of touch” and gather support in areas where the party is not so popular.
He said: “Most beef and lamb in the UK tends to come from Wales and Scotland. Who in the UK is going to be most affected in terms of the farming community? – it’s going to be those in the Highlands and Perthshire and these sorts of areas. Those communities were the ones least likely to vote for the SNP.”
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