Brexit provides Australia with a unique opportunity to create deeper ties between our closest Commonwealth allies, it’s an opportunity that we shouldn’t pass up

Thank you Mr acting deputy president, I rise tonight to discuss a unique opportunity that Australia has been represented with by the United Kingdom’s decision to leave the European Union. Firstly I would like to commend the Turnbull government and trade minister Steven Ciabo for their decisive action to begin discussions for a post-Brexit free trade agreement with the UK, putting us at the head of the queue to form closer economic relations after the Brexit referendum in June last year but as I suggested in the financial review last week, we have a rare opportunity to go one step further too. With multiple Commonwealth nations looking to sign post-Brexit trade agreements with the UK, we could also form a new Global Trade block, with our closest allies, the Commonwealth countries which would most easily fit within this new block would include Canada, Australia, New Zealand and the United Kingdom, a group collectively known as CANZUK. Collectively these four countries have a combined GDP of 6.5 trillion dollars and they account for 3.5 dollars, US in global trade, that means a CANZUK global trade block would be the 4th largest economy in the world behind only the USA, China and the EU. Removing existing tariff barriers could substantially increase trade between these countries, particularly between Australia and the UK, which is currently our 7th largest trading partner, despite the tariffs imposed by their membership of the EU’s custom union but there are more fundamental reasons for a CANZUK trade agreement than just the collective size of our economies. Canada, Australia, New Zealand and the United Kingdom, all share close political, cultural and institutional ties, that are based on our shared history and values, we share Common Law legal systems, parliamentary democracies, free-market economies, respect for individual liberties, language and even a head of state. Its this common history and culture and these shared institutions that have made us among, the most free and prosperous nations on earth. These close ties have also provided the basis for a defense and intelligence sharing relationship that is aptimised, along with the US in the Five Eyes Alliance. Its only appropriate that these close ties also extend to trade. The only reason it hasn’t is because of the UK’s past inability to shape their own trade agreements but with Article 50 already invoked, it is only a matter of time before this changes. Unlike many other multilateral trade agreements, a CANZUK agreement shouldn’t require the long and often drawn out difficult negotiations, this is because we already have a highly successful agreement to base it on, the Closer Economic Relationship between Australia and New Zealand. The CER agreement, already prohibits all tariffs and trade restrictions on goods, originating in the free trade area, it contains measures to minimise market distortions such as export subsidies and it has protocols to reduce barriers to investment, such as higher screening thresholds, rather than drafting an entirely new agreement from scratch, Australia should advocate adding Canada and the UK to the CER agreement, with only a few major changes, if required. Taking this approach would limit the need for regulatory harmonisation, this is because the CER is based on the mutual recognition of goods and occupations, this would distinguish it from the ever-closer political union of the European Union which the British people understandably rejected last year, because it eroded their democratic sovereignty. Like the CER, CANZUK would include the freedom of movement between the four Commonwealth countries, this may sound controversial, particularly because of the role that immigration played in the referendum but polling conducted by the Royal Commonwealth society has shown, CANZUK freedom of movement has clear majority support in all four countries, with 82 % support among New Zealanders, 72 % support among Canadians, 70 % support among Australians and even 58 % support among citizens of the UK (more recent polling by CANZUK International shows ~70 % support in the UK). The final reason why Australia should pursue a CANZUK agreement is that it could act as a strong voice in favour of the rules based, that is under attack by populist movements from both sides of the political aisle around the world, over time this is a group which could grow. In the past week, I’ve had many suggestions of additional countries that would make logical additions to CANZUK (e.g. Singapore), getting the core building block in place first, makes sense though. Brexit provides Australia with a unique opportunity to create deeper ties between our closest Commonwealth allies, it’s an opportunity that we shouldn’t pass up.

Senator James Paterson

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