International affairs

Brexit presents challenges and opportunities for Australia

It was a bad day for the European Union (EU) when UK Prime Minister Theresa May signed the Article 50 letter and Britain left, said Australian High Commissioner to the United Kingdom His Excellency the Honourable Alexander Downer AC.

“On the morning after the Brexit vote, and David Cameron the Prime Minister resigned, it occurred to me that the people who ought to be looking in the mirror and wondering whether they need to improve their performance, were the leaders of the EU,” he said at CEDA's Global trade and trends event held in Adelaide.

Mr Downer said Britain was a reluctant joiner and had been a reluctant member of the EU ever since.

“Late to join, unenthusiastically joined, but joined because the British government at the time thought that France and Germany coming out of the second World War were doing better than Britain and perhaps Britain would therefore be better off joining in with them. In a transactional relationship, in a trade relationship, but not as part of a project to build a great and united Europe,” he said.

Mr Downer said Brexit presents both challenges and opportunities for Australia.

“The bad news for Australia is that we have lost, from the EU, the country with which we are the most like-minded. That means now, without the UK in the EU, we’ll have to invest more heavily in our relationships with countries like France and Germany,” he said.

“On the upside, the opportunities for Australia from Brexit, in relation to the UK, I think are very positive. This will be an opportunity for us to negotiate a free trade agreement with the UK, which will mean eliminating the barriers to entry into the British market that we currently confront,” he said.


Senior Trade and Investment Commissioner to Western Europe Richard Leather said the changing political landscape will lead to a more introspective Europe.

“This period of extended uncertainty, politically, is impacting the decision-making cycles of companies. So we are seeing emerging market phenomena impacting the way decisions are being taken in traditionally fast-moving, established markets,” he said.

Mr Leather said Australia is countering Europe’s introspection with key programs that Austrade and the Department of Foreign Affairs and Trade are working on at both federal and state levels of government.

“Obviously DCNS, the French company, has recently been awarded the contract for the submarines. That means that we are working across Europe with companies, to find ways to make this contract stickier for the economy,” he said.

“By stickier I mean engaging in adjacent industries, finding ways beyond the defence contracting space for them to participate. These big primes have interest that go beyond the defence sector, but the defence sector has provided an opportunity for them to focus on our part of the world,” he said.

Department of State Development Chief Executive Officer Mark Duffy compared Brexit with a divorce and said the EU needed to reflect on its performance.

“What I’ve noticed about divorce, because I have observed a couple of them, is that it’s not just a period of introspection, it’s a period of reflection – ‘what did I do wrong?’ and ‘what can I do better?’,” he said.

“It doesn’t mean we won’t get on, as many divorced families actually do better separate but together, rather than together but ultimately unhappy.”  

Mr Duffy said he was optimistic that the EU will look at itself in the process and that Brexit would be a two-year conversation but possibly longer.

“I think it could be a very exciting thing, that Brexit has brought an event to a head that, I think, was unsustainable.”


Meanwhile, Australian Ambassador to the Philippines Her Excellency Amanda Gorely spoke about the impact that the Trump administration was having on the Philippines.

“I believe the election of Trump offers a potential window for the US to bring the Philippines back into the alliance fold,” she said.

Ms Gorely said many people have spoken of the similarities between Trump and President of the Philippines Rodrigo Duterte and that they may get along very well together.

“I think that’s certainly a possibility, there’s also the possibility that their styles might conflict as well because they’re so similar,” she said.

“I think if the US administration reached out to the Philippine’s administration it would be well received.”

Australian Ambassador to Saudi Arabia His Excellency Dr Ralph King said the Trump administration was a welcome change to the government of Saudi Arabia.

“It is safe to say that the Saudi Arabian government has enthusiastically embraced the change. They were not great fans, especially towards the end, of President Obama,” he said.

Dr King said they are pleased with the opportunity presented by President Trump and highlighted the recent high profile visit by Saudi Deputy Crown Prince Mohammed bin Salman Al Saud to Washington.

“They also like the Trump administration’s attitude to the region especially Iran, whatever our views of that, these are thought of in Riyadh as encouraging developments.”