The UK Supreme Court’s ruling on 24 September regarding the Johnson Government’s prorogation of Parliament has raised uncertainty of the UK’s ability to negotiate free trade agreements (FTA) in the immediate future.
The unanimous judgment held that the five-week prorogation was unlawful as it frustrated Parliament’s ability to carry out its constitutional functions without reasonable justification.
The chances of signing a comprehensive and standard setting FTA with Australia before Christmas 2019, as flagged by International Trade Secretary Liz Truss, is now becoming increasingly difficult.
The Court’s ruling sees Prime Minister Johnson’s ‘we will leave the EU on 31 October’ pledge now on shaky ground. The decision follows the passing of the Benn-Burt Bill in early September, which obliges the Prime Minister to seek an extension of Article 50 from the EU if a deal is not reached before the 31 October deadline. This appears to be an increasingly likely scenario.
The Europeans have continually re-emphasised that the deal struck under Theresa May’s Government will not be reopened and that concessions are only possible on the margins. The May deal was previously voted down three times by the UK Parliament and led to the demise of her Prime Ministership.
The Government’s desire for the UK to be able to decide its own trade and economic relations is a central pillar of its argument.
A Brexit which fails to remove the UK from the EU Customs Union will hinder any prospect of this occurring and is referred to as a 'soft Brexit'. The May deal offered a soft Brexit, leaving the UK in the EU Customs Union.
May’s deal sought to avoid complications on the Northern Ireland and Ireland border. The border issues have deep historical roots and culminated in the Good Friday Agreement of 1997, which removed hard borders between the two nations. Concerns from the EU and pro-remain interests have pointed to the both logistical issues of establishing a customs border and it’s undermining of the Good Friday Agreement.
While the likelihood of a Brexit that enables the UK to take charge of their trade destiny after 31 October seems to be diminishing, FTA discussions with international partners continue to progress.
An Australia-UK FTA is a top trade deal priority for the UK. Amongst many reasons why Australia can, and should be first, is the relative size of trade as well as the consistency of trade standards. Barriers to trade are minimal. Britain is Australia’s eighth largest trading partner and two-way trade is worth an estimated $26.9 billion.
However, a key obstacle is the heavily subsidised UK agricultural sector which wrongly fears competition from Australian products. Protectionists in the UK often cite differences in quality assurance and animal standards, believing that cheaper and lower quality Australian products could undermine the UK domestic market. This is evident in an ongoing debate about the importation of chlorinated chicken from the US and how this would impact a US-UK FTA.
George Brandis, Australia’s High Commissioner to the United Kingdom, has rightly pointed out that the fears of Australian industry raised by lobby groups including the influential National Farmers Union, are unfounded.
In an Telegraph op-ed in February, Brandis wrote that ‘the hungry middle classes of Asia provide us with markets for our agricultural products that we will forever struggle to satisfy – which puts paid to the notion that British markets would be swamped with Antipodean beef and lamb under a trade deal.
While visiting Australia last month, International Trade Secretary Liz Truss has also raised free movement as a matter to be discussed in post-Brexit negotiations.
While Truss’ proposal to consider visa-free travel between both countries has merit, incorporating matters of migration policy to an FTA would only slow the negotiations and should be discussed separately.
Concepts such as the CANZUK (Canada, Australia, New Zealand, United Kingdom) free movement area have long been discussed by politicians and think tanks. It has even been a long-standing curiosity of Johnson. However, progress has frequently been deferred due to the complexity of the matter.
The Labour Party Conference in Brighton has also added further complications to an Australia-UK FTA. Labour spokesman for Trade, Barry Gardiner, stated that a rush of Antipodean lamb and beef could harm the UK’s primary producers. Gardiner also poured cold water on Truss’ migratory negotiations. All of this serves to underscore the unpredictability of future negotiations.
For now, the Johnson Government will continue to pitch a glass half full approach and flag the tantalising opportunities that a comprehensive FTA would entail. Negotiations are obviously all subject to Brexit actually occurring. When migration and agricultural issues are also factored in, the Christmas 2019 deadline flagged by Trade Secretary Truss appears increasingly unrealistic.
Many nations continue to jockey to sign an FTA with the UK in the immediate aftermath of Brexit, if and when it occurs. Australia-UK FTA negotiations benefit from the solid trade ties between both countries, the similarity in legal systems and the strength in historic ties. An FTA offers both governments an opportunity to achieve a simple and quick agreement. A preliminary agreement could also pave the way for further additions in future agreements. If negotiations are not overcomplicated, it stands as an easy free kick for both governments.
Philip Citowicki is a former Adviser to Australia’s former Foreign Minister the Hon Julie Bishop and a former Aide to Australia’s High Commissioner to the United Kingdom.