Australian Prime Minister Malcolm Turnbull’s rapid offer to negotiate a free trade agreement with the UK following the Brexit vote, made on the side-lines of the recent G20 summit in China, has been held up as an example of what is possible for a UK ‘unconstrained’ by European Union (EU) membership. The potential to enhance Anglosphere and Commonwealth cooperation was a tenet of the Leave campaign ahead of the EU referendum; this argument would appear to have been vindicated by Mr Turnbull’s offer. It might also suggest that the Brexit vote is viewed positively in Canberra and will pave the way for a reinvigorated bilateral relationship between Australia and the UK.
Yet Mr Turnbull’s confidence in negotiating a ‘strong’ free trade agreement is not indicative of the Antipodean view of Brexit. Australia’s Trade Minister Steven Ciobo has since sought to dampen expectations of a quick trade deal, noting that “detailed progress” can only begin after Britain has enacted Article 50 and completed its departure from the EU. A poll conducted ahead of the UK’s EU referendum indicated that a majority of the Australian public believed the UK should remain in the EU. The notion that Brexit will boost bilateral relations is misleading. While some aspects of the UK’s relationship with Australia might be enhanced following the vote to leave, such as an eventual free trade agreement, the reality is that Brexit may well weaken ties overall as both nations focus on more pressing economic and strategic priorities.
While a free trade deal is likely in the long term, it will not be as smooth or quick as many believe. The UK simply doesn’t carry the same economic weight as the European single market. The EU is Australia’s largest source of foreign investment, second largest trading partner, and largest services export market. Two-way trade in 2014 was estimated at AU$83.9 billion. By contrast, the UK is Australia’s seventh largest trading partner and eighth largest export market. Two-way trade in 2014 was estimated at AU$21.1 billion. Even if this figure is subtracted from the EU total, the value of Australia’s trade with the UK stands at just one-third that of trade with Europe. Of course, the UK is important to the Australian economy – it is one of Australia’s top sources of foreign direct investment - yet the clear primacy of Europe is why Mr Ciobo also warned that Australia’s fledgling trade negotiations with Brussels, which began in November last year, would take priority over any negotiations with London.
The UK also has economic priorities that may place Canberra on the back burner. Brexit negotiations, which have recently been slated to begin in March, will occupy the majority of the British government’s attention over the next two years. Following departure from the EU, the UK will then begin negotiating trade relationships with its most important economic partners – the EU, the US, and China. In comparison to these three, Australia is a small fish. Just as Canberra is unlikely to prioritise negotiations with London over Brussels, London is equally as unlikely to devote precious resources to Canberra, especially considering the sparse numbers of trade negotiators in the British government.
The notion that Brexit might strengthen Anglosphere cooperation on a strategic level also rests on shaky foundations. In the words of Dr Michael Fullilove of the Lowy Institute for International Policy, Sydney, “the Anglosphere isn’t interested”. Australia’s priorities remain firmly in Asia, where the UK is of little direct strategic relevance. Canberra’s topmost strategic concern over the coming decades is likely to be balancing its military alliance with the US against its economic relationship with China. Intimate ties with the UK are already maintained through the Five-Eyes network and Five Power Defence Arrangements, so there is little that the UK can offer Australia that it hasn’t already. Outside of intelligence-sharing, future security cooperation is likely to be limited to scenarios in which both nations are operating as part of a US-led coalition, as in Iraq, or to disaster relief efforts such as those following Cyclone Pam in Vanuatu last year.
There are, of course, still some areas of common interest. The downing of flight MH17 over Ukraine by a BUK missile deployed from Russia, in which 38 Australians died, highlighted the relevance of European geopolitics and a rules-based global order to Australia’s security. The common threat from Islamic extremism has also brought the two nations together.
Yet these issues of mutual interest existed before Brexit, and the simple fact of their existence does not mean that Brexit will somehow be a catalyst for deeper and wider cooperation. Rather, the UK’s prospective departure from the EU might instead be regarded as a process in which Canberra’s closest European confidante will be removed from Europe’s ‘top table’. The big issues for Europe will continue to be discussed in Paris, Berlin and Brussels, which is where Canberra is likely to turn.