If June 23, 2016, marked the beginning of the end of Britain’s membership of the EU, today marks the end of that beginning. Now the two-year negotiating period for Britain to leave the EU begins.
Over the next two years, Britain will focus on the size of its divorce settlement with the EU, as well as on a UK-EU free trade agreement deal.
But for Australia, now that Brexit really does mean Brexit, what next? The big ticket item for Australia is a free trade deal with the UK.
Although the UK can’t negotiate any bilateral free trade deals until it formally leaves the EU, there will be informal talks over the next two years in readiness for a quick deal in 2019.
Australia has great form when it comes to doing comprehensive, meaningful free trade deals. Think Japan, Korea and China.
The big winners from a bilateral free trade agreement with the UK will be our agricultural exporters, especially beef, lamb and horticulture.
For Australian consumers, UK-manufactured goods should be cheaper. For car lovers, this could mean the best of British automotive at more affordable prices.
We’ll hopefully see a better deal for Australians wanting to live and work in the UK.
Since 2008 the number of Australians working in the UK has fallen by 40 per cent.
This is a result of unlimited migration from EU countries to the UK. The only way British governments could control migrant numbers was to clamp down on non-EU migration.
And this meant Australians.
Once Britain formally leaves the EU, the situation for Australians should improve.
Finally, a post-Brexit free trade deal with Britain could mean more UK investment into Australia.
Britain is already our second-largest foreign investor after the US. An FTA could see the UK foreign investment threshold lifted to $1 billion, in line with other recent FTAs.
Britain is also looking for friends. British Prime Minister Theresa May wants to make the best of Brexit and this means opening Britain up to the world.
Contrary to those on the liberal Left, Britain will not be isolationist. Rather, it will once again engage with the world and Australia as it did prior to being sucked into the EU vortex.
Britain is already reorienting its foreign policy away from Europe. Its early focus is on English-speaking countries like Australia, the US, Canada, and New Zealand. The common values of the English-speaking world, of liberal democracy, the rule of law, and individual freedoms, have delivered peace and prosperity. Freed from the inward-looking shackles of Brussels, Britain can work together with Australia in defence of liberal democratic values in international affairs.
At a time when the global strategic landscape is so uncertain, with the rise of Russian influence in the Middle East, an ever belligerent North Korea, and uncertainty over US-China relations, there is a great opportunity for a renewed closeness in Australia’s strategic relationship with Britain and for it to be a more thoughtful, strategic presence in our region.
Britain and Australia are two stable liberal democracies bookending a developing, but volatile, Silk Road.
Post-Brexit Britain will turn its focus to the engine room of the global economy, Asia, and how to solve the strategic challenges facing this region.
Australia should welcome this shift.