Thread by @EmporersNewC

1. The UK has started the consultation process for the Australian trade agreement. Australia has already carried out some of this as part of an investigation into a future deal, Brexit, and UK trade in general.

So, shall we see what they have to say about the UK and Brexit?

2. OK, first let’s look at submissions involving strategy:

Sone Australians are concerned of damaging their relationship, with Europe, while not wanting to get caught up into the “possibly unrealistic worldview of the Brexiteers”.

3. Australia shouldn't get drawn into this Anglosphere British worldview against its interest, and it is possible the UK has both overestimated the desire of third countries to trade with it outside of the EU, and underestimated how long it will take to do meaningful deals.

4. The UK is likely to be the distressed negotiator, and it should be possible to extract significant concessions. Alternatively, it may be better to allow a major economy to negotiate those first, and then use the result of those negotiations as a baseline.

5. Australia should not hasten to complete a deal as a result of the uncertain geopolitical and economic climate resulting from Brexit. It should create a forum to facilitate a future deal while focusing on the deal with the European Union.

6. Australia has a strategic advantage from being able to spend years closely monitor the UK’s negotiating position. It should not allow the UK to delay or undermine the negotiations with the European Union.

7. There may be history between Australia and the UK, but nostalgia should not override trade realities. Australia should draw on recent developments to diversify its trade links with Europe and foster greater connections with EU, and non-EU, countries.

8. Secondly, the loss of the Single Market is an issue:

Support should be given to Australian businesses who make use of the Single Market, so they can assess options and adjust their business priorities accordingly. Alternative sources of entry should be extensively explored.

9. Brexit will not affect the EU / Australia trade negotiations. In terms of the UK, businesses could be expected to adapt to new terms being negotiated between the EU and the UK, and structure their investments accordingly. For example, the loss of ‘passporting’ is a key issue.

10. Several Victorian companies with presence in the UK use it as a platform to enter the EU market. The success of the EU/UK negotiations will affect the success and / or expansion plans in the region. One issue being ‘passporting’.

11. The effect on financial services remain unclear, and Brexit may result in the centre of the European financial services sector shifting to mainland Europe. Uncertainty may prompt a rebalance to Asia, which will provide new opportunities for New South Wales.

12. Australian lawyers will not be able to work with UK lawyers to set up businesses in the UK that can then take advantage of the freedom of establishment principle, and Australian lawyers can no longer recommend their clients set up in the UK under the law of England and Wales.

13. Brexit has major implications for UK trade while creating opportunities and challenges for Australia’s trade. Consumer goods between Australia and the UK will likely grow, and Australia can also take advantage of the UK’s loss of competitiveness in Europe.

14. Australian firms mainly use UK operations as a gateway into the Single Market. The EU market may be less attractive without the UK, but without this gateway, the UK may not be attractive enough.

15. The scale and nature of the UK market is insufficient for Australian firms (compared to Asia) and the relocation of some of the services industry that predominates the Australia-Europe/UK flows to other EU members is “preoccupying”.

16. Brexit will most likely result in a reduction of outward trade and investment with the UK. SME’s in particular will divert or delay their commitments. FDI can be expected to be reduced or diverted. Firms will have to choose between the EU and the smaller UK market.

17. The EU / Australia wine deal agreement may no longer apply, or would have to be renegotiated. Also, many exporters send their wine to the UK to be re-exported into the EU by virtue of the fact it is a member of the Single Market.

18. The continued ability to import meat in to ports such as Rotterdam, or Hamburg, to distribute to the UK and other memberstates, is the desired outcome for the Meat Trade Association.

19. Immigration is a recurring theme:

The Australian government concerned by the idea of more restrictive conditions for Australian workers.

20. Immigration requests range from freedom of moment, the extensions of visas, or just facilitating greater immigration to Australia.

21. The UK is a competing migration destination. Brexit presents an opportunity to attract a greater number of high skilled talent and entrepreneurs from the UK, and to attract talent that may have headed to the UK before Brexit.

22. It is considered that Brexit could see an upsurge of interest regarding UK migration to Australia. We would welcome the opportunity to work with the Federal Government to capitalise on this.

23. It is important the Australian government take steps to ensure existing arrangements and flexibilities, not only for the movement of people between Australia and the UK, but between the UK and the EU.

24. Any changes to Freedom of Movement in the UK has significant implications for the availability of talent in the British workforce, and the ability to attract European talent, potentially restricting growth. Skilled labour availability is a critical consideration.

25. The UK losing EU scientific funding could help Australia attract top researchers. Australia may also become a more realistic option for students looking for higher education placements. The UK’s incoming talent may be impacted, but collaboration opportunities could increase.

26. The topic of Education takes us nicely into regulatory alignment requests for the future trade deal:

Recognition of academic qualifications was requested with protections provided by a Most Favoured Nation (MFN) clause.

27. In health, there were requests for closer harmonisation of regulatory systems. This included a request to treat soap as a pharmaceutical because it is “in fact promoted to dermatologists”…or at least recognition of the TGA-Issued Licence to Manufacture.

28. A request to drop the EU 'enforced' measure preventing movement of health professionals between the UK and Australia.

Unfortunately, there is no such requirement in the EU, and it is actually national policy. (H/T Steve Peers)

29. The Dental Associations of Australia and Britain submitting a request for regulatory alignment, stating that the risk of a Hard Brexit is that the red tape burden would increase over time.

30. The Law Council want the trade agreement to support regulations and mechanisms to facilitate free movement of legal services, and to incorporate a text on best practice regulation of multi-jurisdictional legal services.

31. Unsurprisingly there were multiple submissions that requested Australia seek a resolution with the UK to allow them to export growth hormones in beef.

32. The Grape and Wine authority want to renew the existing wine agreement with a standstill clause. They have also requested the removal of barriers and, thanks to one of my contacts, a source in the Wine and Spirit Trade Association has confirmed they are unlikely to object.

33. The Australian Food and Grocery Council know where the UK have been influential in setting EU policy and they are concerned about what protectionist policies the UK may actually adopt in the future.

34. Ford submitted a request that the trade agreement had provisions to prevent currency manipulation.

35. The Australian Sugar industry Alliance sees great opportunity in being able to trade tariff and quota free with Tate & Lyle. (Which they may have got from the European Union agreement)

36. Finally, by returning trade policy to domestic competence, the UK is now exposed to other political requests. Like the fact Australia is sick of means testing UK immigrants as a result of pension freezing, and this may be discussed in conjunction with the deal.

37. In conclusion:

The Commonwealth argument is a distraction. Australia has been part of a regional trade plan that dates back to 1994. Australia seem to see Brexit is good for their deal, bad for the UK, bad for their UK businesses, but good for their competitiveness in the EU

38. There are a number of areas that can benefit, there a number of sectors explicitly requesting mutual recognition or the removal of non-tariff barriers. Of which, the wine sector request does seem promising.

39. Unless the UK joins CPTPP, it’s unlikely get movement on exporting beef with growth hormones, but they probably expect the negotiations with the bigger countries to yield that result for them.

40. All respondents were enthusiastic at the deal, but only in the context of the benefits of a free trade agreement. The greater majority were negative about Brexit, and the sectors that did highlight genuine benefits seemed to be limited to Wine and Education.

/End