One of the UK’s closest allies has urged Theresa May not to put up trade tariffs against the EU, even if Brexit talks end without a deal being struck.
The Australian High Commissioner to the UK told an audience of economists and business leaders that Britain should adopt the “mindset” of being a free-trade country, even if Brussels decides to introduce the potentially damaging barriers for exporters.
Such an action would mean tariffs being dropped against every country in the world, as under international rules, preferential treatment cannot be given to one specific market without a trade deal first being agreed.
Alexander Downer - Australia’s longest serving Foreign Secretary before entering the diplomatic corp - insisted that free trade deals between the UK and other countries after Brexit could be achieved easily as long as Britain doesn’t try to “carve out” industries it wishes to protect.
Australia has been one of the most enthusiastic champions of the UK’s role outside the EU, with officials from the country meeting their British counterparts to discuss trade within months of the Brexit vote.
Speaking in Westminster, Downer said his country was waiting to see what the UK would do if no Brexit deal was reached, leading to Britain leaving the EU on World Trade Organisation rules.
He said: “What would you do? Would you impose tariffs on EU exports to the UK or wouldn’t you? That would have some macro-economic affect on this country.
He added: “I personally think, and it’s not the Australian government’s view, you might be better off having no tariffs on EU exports to the UK even if they put tariffs on your exports to the EU.”
Downer described the principle of free trade as coming “under pressure” as a populist backlash against globalisation sweeps through some western countries.
“The last thing that we need at this time in history is for the European Union and the United Kingdom to erect tariff barriers between each other,” he said, adding: “We see that as inimical to global economic growth, it will damage growth in this country, it will damage growth in the EU and it will damage global economic growth and it will damage the international argument for trade liberalisation.
“At the moment you do have free trade with the EU, we’d like to see that continue - however you negotiate that.”
Downer has previously lamented the UK joining the then-European Economic Community in 1973, as it restricted the goods Australia could export to Britain.
During last year’s referendum, the official Vote Leave campaign and Ukip’s Nigel Farage extolled the virtues of the UK reconnecting with the Commonwealth after Brexit - something from which Australia would benefit.
Downer also offered some reassuring words for those who believe it will take the UK many years to negotiate free trade deals outside the European customs union.
He said: “A lot of people say that free trade agreements are incredibly difficult to do as it took the European Union seven years to negotiate CETA - the trade agreement with Canada - and these are complex matters and it will take Britain years and years to negotiate these things.
“I just say to you - that depends. That depends what you want to protect, what carve outs you want from trade agreements. In the last 12 years Australia has negotiated 8 free trade agreements in the last 12 years.
“We’ve negotiated a free trade agreement with the United States in 2005/6.
“That took us 15 months to negotiate with the United States. Why? Because basically we just wanted - the leaders of our countries decided - to open up free trade.
“There’s a couple of carve outs. For example, we still can’t sell much sugar into the United States, there are some regulatory issues that we had to manage but we did that and at the same time negotiated other free trade agreements.”