AUSTRALIA & THE UNITED KINGDOM
Australia and the UK have a significant and comprehensive relationship underpinned by shared heritage, common values, strong people-to-people links, closely aligned strategic outlook and interests and substantial trade and investment links.
The UK and Australia enjoy a high level of cooperation across a wide range of foreign policy, defence, security, intelligence, trade and economic issues. The two Governments have secured a series of agreements and partnerships covering a wide range of sectors of shared interest.
There is also frequent bilateral collaboration and dialogue at the highest levels across government on global issues such as international security, multilateral cooperation and economic issues on the G20 agenda. The Australia-UK Ministerial Consultations (AUKMIN) is the premier bilateral forum on foreign policy, defence and security issues where ministers look for ways in which Australia and the UK can work together more effectively to deal with contemporary global challenges.
While the EU as a whole has been Australia’s largest economic partner, a significant proportion of this bilateral relationship has occurred directly with, or through the UK. As a familiar and attractive destination for Australian companies expanding their interests abroad, the UK has often served as a preferred gateway and regional headquarters within the European Single Market.
In 2018 the two-way investment relationship with the UK continued to be Australia’s second largest at around $982 billion. The UK was also in Australia’s top 10 largest trading partners with two-way trade of over $30 billion.
The relationship post-Brexit
The UK’s departure from the EU and the future format of the UK-EU relationship will deeply impact the Australia’s trade and investment relationship with the UK and has already seen many Australian companies across different sectors relocating part of their operations.
The UK and EU are now in a transition period until 31 December 2020, during which the status quo prevails while the terms of the future EU-UK relationship are negotiated, including a free trade agreement. The UK is now looking to its future outside of the EU. The UK Government’s vision of a “Global Britain” campaign includes looking to old friends and working to increase trade and investment. Australia is seen by the UK as a key trading partner post-Brexit and the negotiation of an ambitious and comprehensive free trade agreement will be a top priority for the UK once it has finalised its arrangements with the EU.
The Australian Government is currently working to ensure that any risks posed by Brexit after the transition period are addressed. An Australia-UK Trade Working Group has been active since 2016 to scope out the parameters of an FTA for negotiation post-Brexit and to exchange views on global policy issues and developments.
The Australia UK relationship has been reinvigorated in recent years by a shared commitment to preserving liberal values and a multilateral rules-based order and an Australia-UK FTA is the missing piece to the bilateral architecture, constituting a needed framework to further develop the trade and investment relationship. A comprehensive, high-quality Australia-UK FTA would serve as a mechanism to enhance stability, optimise conditions for business flows by dismantling trade barriers, open market access, harmonise the two parties’ regulatory frameworks and has the potential to drive collaboration in emerging areas of opportunity including the digital economy and innovation.