British PM Theresa May has triggered article 50, sparking the UK’s exit from the EU.
EVERY morning, on breakfast tables up and down the UK, sit boxes of Weetabix cereal, the nation’s favourite. If it sounds similar to Weet-Bix, that’s because it is. They were invented by the same person.
Now, with increasing talk of an Australia and post-Brexit Britain free trade deal in the air, there’s an opportunity for Brits to get reacquainted with the original. They might even be persuaded to forsake Marmite for Vegemite. After all, Londoners already love shopping at Australian-owned Westfield shopping centres and flat whites have become the milky coffee of choice across the British Isles.
But, says the CEO of the Australian British Chamber of Commerce, David McCredie, just because Australia and Britain have so much common — including a shared sense of humour — Canberra needs to tread carefully to ensure it doesn’t “jeopardise” its relationship with the European Union in an effort to cosy up to London.
On Wednesday, British Prime Minister Theresa May signed the letter triggering Article 50 of the Lisbon Treaty. This formally fires the starting gun on the UK’s departure from the EU, a process that will take two years.
Mrs May said while the UK should be a “best friend and neighbour” to the EU, it would now look beyond Europe for future partnerships.
“[The UK] is very keen,” Mr McCredie told news.com.au. “[British trade minister] Liam Fox has already said old friends will be among the first they do a deal with and he singled out Australia and New Zealand to engage with first.”
Free trade agreements (FTA) significantly lower tariffs on goods exported and imported between signatory countries. Australia has recently signed free trade deals with China, Japan and Korea.
Mr McCredie said signing a FTA with Australia could be a far easier first deal for a post EU Britain than trying to immediately sign agreements with the US or China.
“Australia and the UK have very complementary markets, a Westminster political system and a great deal of cultural crossover from rule of law to comedy.
“Doing a deal with the US, that has 50 states, looks a little complex compared to doing a deal with Australia,” he said.
“An Australian deal would give the UK a good footing to discuss more complex agreements.”
Mr McCredie said Australian companies were already prospering in Britain.
“Look at Macquarie Bank, they have announced $10 billion of investment in the UK, or Lend Lease and Westfield. There are many organisations that are doing well, if we can add fuel to that process we’ll be in an even better position.”
But Australian manufacturers may want to hold off popping the bubbly just yet. Britain is still a member of the EU for several years and it can’t actually start shaping a deal until it officially leaves the union.
Besides, Australia has its eyes on a far bigger prize than a UK deal. An FTA with the EU itself would open a market of 675 million people, as opposed to Britain’s population of 65 million.
“Australia’s priorities, in terms of these free trade deals, is that we are completely aware that the UK is not in a position to start negotiations,” said Mr McCredie.
“At this time we are looking at an EU [FTA] first while the EU and UK are sorting out where they need to be.”
In 2014, EU foreign direct investment in Australia was valued at $169.6 billion and Australian foreign direct investment in the EU was valued at $83.5 billion. However the UK accounts for by far the largest single chunk of that investment.
Talking to ABC’s Lateline on Wednesday night, Ben Wellings, a lecturer in politics and international relations at Monash University, said Australia had to be careful not to get in between a divorcing couple.
“The Government has to be very mindful of not upsetting one party by looking too keen to do an agreement with another party, if and when negotiations between the UK and the EU get difficult,” he said.
Mr McCredie reiterated caution was the watchword.
“We don’t want to do anything that jeopardises the opportunity between Australia and EU, that is our priority and we want to put that in place and the UK recognise that.”
He didn’t want to put a time frame on a free trade deal with Britain.
“There are many bridges to cross and it took Australia something like 15 years to finalise an FTA with the Chinese and while I don’t suspect it will take that long for the UK, it won’t be quick.”
It could be some time before Brits get unfettered access to all the Australian products we enjoy every day.