Alexander Downer

‘In the digital age of cloud computing, the idea that steel and plastic pipes are integral to our life seems anachronistic,’ wrote Rishi Sunak. ‘But our ability to transmit confidential information, to conduct financial transactions and to communicate internationally all depend upon a global network of physical cables lying under the sea.’ And what if those cables are cut? ‘The threat is nothing short of existential.’ Sunak wrote those words five years ago in a paper for the thinktank Policy Exchange. Last weekend, as he was running to become prime minister, he was proven right. The Shetland Islands lost phone and internet connections after the cable that links the islands to the mainland was severed.

The election campaign is under way in Australia, barbs are being exchanged, candidates denigrated and abused, and promises – many of which are just fantastic in the literal sense of the word – are being made. The Prime Minister, Scott Morrison, who is the leader of the Liberal party, is being challenged by the Labor leader, Anthony Albanese. Although Morrison has the edge over Albanese as preferred prime minister, neither is much loved. The leaders are unlikely to be a decisive issue in the election. What is the deeper mood of the country? That needs to be put into its historical context. Ever since the mid-1970s, Australians have expected political parties to be economically responsible.

How significant is the UK-Australia trade deal announced this week during Prime Minister Scott Morrison’s visit to Britain? Well, Australia already has 17 genuine free trade agreements, including with the United States, Japan and China. But the free trade agreement with the UK is undoubtedly one of the highest quality agreements Australia has ever reached. In terms of the liberalisation of markets, it is only exceeded by the free trade agreement Australia has with New Zealand. This demonstrates something very important: that the UK, having left the European Union, is going to be a genuine champion of global trade liberalisation.

The economic argument for free trade is politically more important than ever. A drift towards the use of tariffs and other protectionist measures has increased in G20 countries since the global financial crisis and there are signs that the protectionist trend could accelerate in the wake of Covid-19. This at a time when a global economic recovery will urgently need the boost that trade offers. One of the great opportunities of Brexit is that the UK can lead the world, with countries like Australia, in championing free trade. The UK has made clear that signing free trade agreements is a top priority as it leaves the EU’s customs union. Negotiations with the United States are now under way, and Japan, Australia and New Zealand are earmarked as the next targets.

Now the UK is leaving the EU, Boris Johnson's government can start planning a serious trade strategy for life after Brexit. So far the focus has been on a UK/US free trade agreement. But before that, the initial challenge for Britain will be to establish a rational set of priorities. First, the government must ask what resources is it prepared to commit to trade policy? Second, it needs to establish what trade agreements would be most beneficial to the UK economy. After all, there’s no point in giving priority to a laborious trade negotiation with, say, Burkina Faso, if the benefits of that agreement would be very limited. And third, how difficult would it be to conclude a free trade agreement with those priority countries?

Spare a thought for us foreigners. We’re desperately trying to understand the meaning of the Brexit arguments being thrown around in the House of Commons. We all have our own countries too, so we view those arguments through the lens of our homelands. So here are a few reflections on how we react.  Theresa May's deal has the UK leaving the voting structures of the EU but remaining in the Customs Union until the EU gives the UK permission to leave. Australia and New Zealand have a free trade agreement and co-ordinate their regulatory regimes through a joint council. But they certainly don’t have a customs union otherwise neither country would be able to make its own trade policy.

The announcement in this week’s Budget that Australians (as well as those from the US, Canada, Japan and New Zealand) will have access to e-passport gates when entering the UK is a welcome sign that Britain is serious about going global. The million or so Australians who visit each year are sure to be delighted by this gesture.   There’s a backstory here: when I was the Australian high commissioner in London, I told everyone in government with ears to hear (including the then-home secretary Theresa May) that Australians were upset about being subjected to long queues at Heathrow while EU citizens went through a special fast-track process. Frankly, given our history of fighting alongside Britain and our shared head of state, it was downright insensitive.