Brexit: how can Australia secure the right trade deal?
An international trade expert has proposed a plan for Australia to secure a beneficial trade deal with the UK, as Brexit draws nearer.
The UK parliament has given Britain's Prime Minister Theresa May authority to trigger Article 50. Article 50 is a condition of the EU's Lisbon Treaty that allows member states to exit the bloc. Image: WikiMedia Commons
Trade deal talks with the United Kingdom should only begin once Australia is assured of the UK鈥檚 post-Brexit trading status, says a expert.
In an expert submission to the Joint Standing Committee on Foreign Affairs, Defence and Trade, suggests Australia should also wait for larger trading nations such as Canada and the US to negotiate trade deals with the UK 鈥撀爌aving the way for Australia to build on concessions and secure better terms in a deal for itself.
is investigating Australia鈥檚 trade and investment relationship with Britain. Associate Professor Melatos鈥檚 submission addresses several matters listed in the .
鈥淏rexit makes it difficult for Australia, because we don鈥檛 yet know what the UK鈥檚 trade status will be once it makes its exit from the EU,鈥� said Associate Professor Melatos, of the University of Sydney鈥檚 School of Economics.
The submission states the UK is likely to become a 鈥榙istressed negotiator鈥� once Article 50 鈥� which enacts the UK鈥檚 departure from the EU 鈥撀爄s triggered.
Australia can build on gains secured by the US and Canada
鈥淭he greatest risk for Australia is not in moving late or even not at all. The risk for the nation is in not capitalising on a once-in-a-lifetime event to secure maximum trade and investment preferences from the United Kingdom,鈥� said Associate Professor Melatos.聽
Associate Professor Melatos鈥檚 analysis of national bargaining positions suggests that countries such as the United States and Canada will be better placed to exploit the UK鈥檚 weakened bargaining status.
For example, if the United States can secure substantial intellectual property concessions, and Canada substantial concessions around access to the UK鈥檚 agriculture market, Australia can then benefit by piggy-backing on their efforts to form a stronger baseline for its own deal.聽
What trade deal conditions could negotiators face?
Associate Professor Melatos鈥檚 analysis also outlines two post-Brexit scenarios for their effect on Australia鈥檚 trade deal prospects.
The first, in which there is no preferential trade deal between the UK and the EU post鈥怋rexit, would see UK鈥怑U trade based on World Trade Organization rules, giving the UK complete freedom to strike a deal with Australia.
鈥淭his would allow Australia to push for the most aspirational trade agreement possible,鈥� explains Associate Professor Melatos.
A second scenario 鈥� where the UK and EU do strike a post-Brexit trade deal 鈥� would serve to restrict the concessions that the UK could grant Australia in bilateral negotiations, most likely leading to a less positive outcome for Australia.