Farmers and politicians react to New Zealand pact as fears of 'major threat' brew

Over the last few weeks our Rural Affairs Correspondent Hannah Thomas, and our Political Editor Adrian Masters, have spent time across Wales and Westminster speaking to people in Welsh farming communities and politicians in the House of Commons.

They've been analysing the mood over the prospect of more free trade deals with other countries.

By Hannah Thomas, Rural Affairs Correspondent

So there looks likely to be a new UK free trade deal, with another new country.

Here we are, a solid twenty four hours after digesting the news that the UK government has agreed a pact in principle with our Kiwi friends.But in Wales, all the agreement with New Zealand has brought is new concerns from Welsh farmers.It was not unexpected, and follows very much hot on the heels of the deal agreed with Australia earlier this year.

But this one - like that one - has seen more reaction from the Welsh agricultural industry than anyone else.

Quite simply because it is the one who, perhaps, has the most to lose given that it prides itself on PGI Welsh lamb and PGI Welsh beef. New Zealand and Australia can export much more red meat than farmers can here.

Clare Morgan runs a beef and sheep farm in Haverfordwest. She told me “We’re competing with two countries that have significantly less production costs. Australia - for example - has 65% less production costs for sheep, and we are sort of two and a half times the production costs that they have for beef.”

It is the standards of the beef and lamb produced in these two countries that the farming unions have grave concerns about.

Farmer Clare Morgan

John Mercer is the director of NFU Cymru. He says Welsh farmers are proud to produce food to the highest environmental and animal welfare standards, and competing with Australia and New Zealand will not be on a level playing field.

He said: "Our concern is the cumulative impact of these various trade deals. The Australia deal - for example - we don’t think is a good deal for Welsh farming, and we’ve got other deals coming down the line.”

But is there positivity in some of those deals? The UK Government last month said that Welsh lamb could be exported to America for the first time in 32 years, and worth twenty million pounds within five years. Surely that's got to be a reason to celebrate? 

'We're up against some big superpowers. So we've got to fight.'

“Absolutely. That’s fantastic news" he said. "What we’re waiting for, however, is clarification from the US over the Prime Minister’s announcement.

"I guess the one challenge is, that once we open up it’s only the beginning of it. We’ve got to establish a market from scratch.

"We’re up against some big superpowers in Australia and New Zealand, who’ve been exporting to the US for many years. So we’ve got to fight and establish ourselves over there.”

And question marks over the New Zealand deal don't stop there. The Farmers' Union of Wales said: " It shows a willingness to undermine the UK farming and food security in return for negligible benefits to the economy.

Director of NFU Cymru John Mercer

"The winners in this deal will clearly be New Zealand as it allows them to up their exports of food to the UK, representing a major threat to Welsh farmers."

The body responsible for promoting Welsh lamb and beef, Hybu Cig Cymru, said: "The trade agreement is set to immediately increase access to the UK market for New Zealand beef, and also remove all restrictions on meat imports within 15 years.

"Tariff-free imports of beef will increase straight away from 454 tonnes to 12,000 tonnes, before rising to 60,000 tonnes over 15 years.

"New Zealand already has the right to export 114,000 tonnes of lamb to the UK without tariffs. The deal will give an additional allowance before restrictions are completely removed in 2036. 

"Wales does not fear trade – we produce high quality red meat which can compete with any in the world. But such generous free trade agreements threaten to distort the market."

If you thought we had heard the last about free trade agreements and the controversy they bring, think again. There may be much more battling to come yet, and we will hear much more of 'we aren't being listened to' by Welsh farmers.By Adrian Masters, Political Editor

Ministers in London insist that they are listening to concerns of farmers and won't sell them short in the deals that are close nor in deals in the future.

A UK Government spokesperson said, "We will not compromise our high standards and any deals we sign will include protections for the agriculture industry.

“Agreeing ambitious trade deals with Australia and New Zealand would pave the way for unparalleled opportunities in the Indo-Pacific, and we will help our farmers take advantage of these markets.”

But political concerns, like those in the industry, are not just about the impact of the trade deals in progress but also the possible impact of what they involve on future deals. 

Sheep farmers could be affected Credit: PA

In particular, those who are raising questions say that the issues they're worried about in agreements with Australia and New Zealand could become 'baked in' to all future trade deals. 

For instance, when it comes to full-blown talks with the United States, American negotiators will go into them knowing that the UK has agreed certain things like zero tariffs, with other countries and the EU. Why then, the argument goes, would the Americans agree anything less? 

It's to deal with concerns like this, that the UK Government has announced a newly beefed-up Trade and Agriculture Commission, chaired by Professor Lorand Bartels with the aim of providing "independent scrutiny of new trade agreements."

Welsh Secretary Simon Hart is quoted as saying, “International demand for British and Welsh produce is increasing and this is an exciting time for farmers. 

"The new Trade and Agriculture Commission will help to ensure Welsh farmers are protected and that high standards remain at the heart of our trade agreements.”

Political opponents say that's come a bit late. Plaid Cymru MP Ben Lake told me: "We have seen much being spoken about the trade and agriculture commission which is supposed to be that little bit of a safeguard for farmers and their industry, a way for them to get their voices through and to scrutinise both the mandates and the agreements, and yet we see the Australia deal signed before the agriculture commission even got up and running.”

Opposition parties are often accused by government ministers of "talking down" opportunities and concentrating on the negatives, so I put it to Ben Lake that the fact that Welsh lamb and beef can now be sold in the United States must be cause for celebration. 

“Of course, any new market is to be celebrated. But we also need to realise that if we are to truly take advantage of these opportunities that there’s a lot of groundwork to be done ahead of it in terms of promotion and ensuring that retailers in these different markets are ready to accept our wonderful products. 

"The fact of the matter is that we don’t seem to be seeing a very consistent strategy from the UK Government in, yes opening and gaining market access but then ensuring that the promotion is there and that people in these wonderful countries are ready to buy Welsh meat.”

Whether or not they feel that they're being listened to, the concerns of Welsh farmers are certainly high on the political agenda.

Recently the cross-party Welsh Affairs Committee of MPs recognised those concerns, although its report also stated that the Australia deal "is unlikely to have a significant impact on Wales in the short term."

Committee members added: "Farm businesses are already facing some uncertainty in the transition away from the EU system of farm payments and the changing trade environment. 

"The UK Government and Welsh Government must work with the agri-food sector to ensure that UK producers have the skills and support needed to thrive in a new global trading environment."

They welcomed too that the UK Government has promised a pause for parliamentary scrutiny of three months from whenever a final text of the Australian Free Trade Agreement is published.