The UK’s Relationship With Australia Will Be Revitalised After Brexit

Written by:
30 January 2017
The UK’s Relationship With Australia Will Be Revitalised After Brexit - Featured image

Theresa May confirmed in her landmark speech at Lancaster House earlier in the month that Brexit really does mean Brexit. Britain will be leaving the economically strangling common market protectionist racket and seeking opportunities across the world.

This, however, was not welcomed by all. Green MP and co-leader Caroline Lucas has complained that May is “hoping for far flung countries to do good deals with us”.

The concept that the rest of the world is “far flung” and that there is a low probability of good deals is laughable. Politically, socially and culturally Britain has far stronger bonds to many far flung countries than it does to Europe.

Taking the case closest to my heart – Australia – we share a language, a common political system, culture, history, the rule of law, and similar economic and legal systems. We sent thousands of our young to fight, and many die, side-by-side in two world wars.

These traditional bonds, however, are clearly not as strong as they used to be. Australia is no longer a colony, and, following the Australia Act of 1986, the UK no longer has residual legislative or judicial authority. These are of course positive steps. Australia is one of Britain’s many success stories spreading the core institutions of Western civilisation, establishing a fellow constitutional monarchy, on the other side of the world.

Nevertheless, relations – which already include strong trade and security bonds – have ebbed and flowed. The most damning moment in the Australia-UK relationship came in 1973 when the UK joined the European Economic Community. This decision was a shock to the Australian government which had previously been promised by the UK that nothing would be done to damage our trade relations.

Symbolically, it was a turning away from traditional bonds, an abandonment of the Australia-UK relationship in favour of new friends. In practice, the UK’s decision meant the imposition of tariffs on Australian goods that had previously never existed, and a consequential decline in Australian exports to the UK.

Let’s start with an example close to my heart: wine. Australia is the UK’s biggest source of wine imports after Italy. In 2014, Britain imported 245 million litres of Aussie wine. However, the EU imposes various tariffs on wine, up to an astonishing 32 per cent. This hurts Australian exporters, to the tune of £36 million per year, according to the Australian Grape and Wine Authority, and pushes up the cost of Australian wine for British consumers.

An example with even more wide ranging importance is agriculture. The origins of British food, stretching back to the monumental debates over the Corn Laws in the 19th century, are largely foreign: more than half of the UK’s food comes from abroad. Australia, on the other hand, with abundant land, is a food exporter. Sixty per cent of our food is exported – and this is predicted to increase over the coming years. Historically, much of these exports went to the UK.

At the end of World War II, the UK represented a third of Australian agricultural exports, including 90 per cent of butter and 80 per cent of beef. However, following the introduction of EEC tariffs, and the emergence of other markets, by the mid-1980s the UK became just 2 per cent of Australia’s rural exports. Today it is just 1.5 per cent. We are largely locked out of British agriculture due to EU tariffs of up to 20 per cent, as well as import quotas on our key export products, including beef.

The full Brexit gives the UK the opportunity to remove these barriers to trade, substantially benefiting consumers. It means cheaper Aussie wine on British shelves. It means access to high quality Australian agriculture products. This provides substantial benefits for UK consumers, as well as opportunities for British exports back to Australia, particularly in services.

Brexit also provides other opportunities outside of trade. It hopefully means a fairer, less discriminatory immigration system. The concept of free movement may nicely appeal to Europeans; however, it quite clearly discriminates against the rest of the world. It tells Australians, New Zealanders and Canadians – who share a head of state with the UK – that we are less welcome than others. This makes the UK a lot less appealing to much of world’s best talent.

Brexit also means the UK can provide independent leadership at the World Trade Organisation, a particularly important facet at a time when protectionist sentiments are growing around the world. It also means potential trade agreements across the Commonwealth, as well as with the world’s biggest economies – the United States and China.

This will of course all depend on appropriate deals that deliver mutual recognition of standards, and the abolition of tariffs and quotas. However, I am confident of a high probability of success, particularly in Australia’s case.

In just the last few years Australia has completed trade deals with China, Japan and South Korea. Australian Prime Minister Malcolm Turnbull was the world’s first leader to propose a trade deal with Britain after Brexit. Australian Treasurer Scott Morrison visiting London last week and met with his counterpart, Philip Hammond, to lay the foundations of a new trade agreement and easing restrictions on movement.

Australia and the UK not only have a range of economic symmetries, we have shared bonds that stretch the entity of our history. These bonds will grow ever stronger after Brexit.


This article originally appeared on Brexit Central.

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