British farming, forestry and fishing will suffer a £94m hit from the free trade agreement, a Department for International Trade (DIT) document has revealed.
The government also expects a £225m hit to the semi-processed food sector, conceding that it was another area expected to “contract” as a result of increased competition.
Labour said ministers had “failed to stand up” for British interests, while the Liberal Democrats claimed farmers and others were being “sold down the river” over the deal signed with Australia last week.
“This impact assessment proves what so many feared – buried in the small print is a £100m hit to our farming and fishing sectors that will hit rural communities hardest,” said the Lib Dems’ environment spokesperson Tim Farron.
The MP added: “Boris Johnson has sold farmers down the river to make a quick buck in a misguided trade deal with Australia. Now the reality of what’s on the table is clear, it’s vital that parliament is given a vote on the deal.”
The government predicts a reduction in gross value added (GVA) of around 0.7% (£94m) to primary agriculture and 2.65 per cent (£225m) to semi-processed foods compared with 2019.
The economic blow to Britain’s agri-food businesses will be “driven by increased import competition in the beef and sheep meat” from Australia, the document stated.
The DIT report also found that Britain’s agriculture and semi-processed foods sectors could see a further reduction in GVA “over the long-run” as a result of the free trade agreement.
Labour MP Nick Thomas-Symonds, shadow international trade secretary, told The Independent that the “shocking” figures demonstrated clear ministers were “failing to stand up for UK interests in negotiations”.
He added: “Ministers seem to be prioritising a press release announcing a completed deal over supporting jobs and livelihoods here in the UK. The British people deserve better from this incompetent, failing government.”
The impact assessment on the deal refers to Australia as a “large, competitive producer of agricultural products” – pointing to the “potential for the deal to result in lower output for some agricultural sectors [in the UK] as a result”.
Meanwhile, an independent study on the Australia and soon-to-be-finalised New Zealand trade deals found that “the losers from these deals are much more concentrated in parts of the agricultural sector”.
The Resolution Foundation think tank said the government “appears to be showing a willingness to accept some losses in less productive and competitive domestic industries – even in highly politically sensitive industries such as agriculture – in order to deliver its Global Britain agenda.”
The UK’s manufacturing sectors, such as motor vehicles and machinery and equipment industry, are expected to gain the most from the Australia deal, according to the impact assessment.
The trade department insisted that the latest free trade agreement will deliver a boost to the economy overall.
A spokesperson for the DIT said: “The deal is expected to increase trade with Australia by 53 per cent, boost the economy by £2.3bn and add £900m to household wages each year in the long-run. It will also play an important role in levelling up the UK, delivering benefits for towns, cities and rural areas throughout the country.”
The department added: “Maintaining our high standards is a red line in all our trade negotiations. That is why this deal contains safeguards to support the most sensitive parts of the UK farming community, including a gradual removal of tariffs over 10 years and a safety net that allows tariffs or restrictions to be reimposed if the industry faces serious harm.”
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