03 February 2020
The UK quite rightly was thoroughly engaged with the EU for most of its 48 years of membership. Some might be nostalgic for the trading relationship Australia enjoyed with the UK prior to the establishment of the European Common Market, but that is like wistfully wishing for the return of pounds, shilling and pence as our currency. While Britain can and now has formally left the European Union, it cannot ignore the enormous market of 500 million European people living on the other side of the English Channel. Neither can Australia. I entirely agree with the suggestion of the Minster for Trade, Simon Birmingham, that Australia should seek to ensure the UK becomes one of our top 10 trading partners as it leaves the EU. As Shadow Trade Minister, I want Australia to continue to open its economy to the world and to diversify its trading partners. But we must be realistic about our geography and the competitive nature of open and free international trade. The UK choosing logically many years ago to focus on trading with the extraordinarily significant market on its doorstep forced Australia to do the same thing. It may have taken us some time, but Australia had to confront its geography and accept that it is part of Asia, and that our future prosperity could only be assured by engaging and trading with our neighbours in the region. Successive Australian governments have taken this road and sought to negotiate trade agreements across the Asia-Pacific, which is responsible for 60 per cent of the global population and the greatest growth potential in the world. The nations of South-East Asia and North Asia account for most of our international trade in iron ore, liquefied natural gas, agricultural produce and education. While an FTA with the UK will be of significant importance for many farmers and food producers, the products of Australia’s largest export industry – the natural resources produced in huge volumes here in WA – are not in great demand in the UK. And in our third largest export industry of education, Australia and the UK will always remain firm competitors particularly in the markets across the Indo-Pacific. Both the UK and Australia will be competitors in the European market for many products. If the Ashes are anything to go by, we all know how competitive our two nations can be. Some of the claims made in recent days about the potential benefits of an FTA with Britain appear overly optimistic. Birmingham says the deal could create “thousands” of jobs – but his Government’s refusal to allow any independent economic analysis of the benefits of FTAs it signs means this may never be formally verified. The suggestion by some in business that Qantas’s direct daily flights from Perth to London could boost Australia’s horticultural and seafood exports is similarly enthusiastic. This Qantas service is hugely beneficial for people-to-people links. But the freight transport capacity of the 14,498km, 17-hour daily air journey to London is somewhat dwarfed by the 206 million tonnes of goods that were transported in 2018 from UK ports into European Union nations. The FTA negotiations will be an interesting competitive trade trek for both our nations to navigate. A particularly important aspect of the ongoing trade relationship with the UK that must be front of mind is the role of investment.It is important to remember that British investment drove the economic growth of Western Australia in the 1950s, starting with the construction of the BP Oil Refinery in Kwinana. My father was among the first workers at BP Kwinana. Today, many of my constituents in the electorate of Brand, and indeed people I went to school with, keep the only oil refinery on the Western coast going. The construction of the BP refinery and the accompanying navigation channel is the cornerstone of the Kwinana Industrial Area which continues to drive the WA export economy. Australia and WA owe much to the investment of the UK companies in our economic development. Attracting increased UK investment in Australia should be a crystal-clear priority of any Australian Government. The UK is already the second largest source of foreign investment in Australia, with the stock of investment valued at $574.8 billion in 2018. Enabling more investment will be one of the greatest contributions of that once-daily passenger air flight between London and Perth over and above the transport of niche fresh produce. This piece was first published in The West Australian on Monday 3 February 2020.
Authorised by Madeleine King MP, U 4-5 Chalgrove Ave, Rockingham WA 6168