Features Australia

Toasting Brexit

15 September 2018

9:00 AM

15 September 2018

9:00 AM

When Yes, Prime Minister’s Sir Humphrey explained in 1986 to his PM that the determination of the British Foreign Office to join the Common Market was in order to destroy its unity from within (in line with its consistent policy for centuries of keeping Europe divided), he was accurately reflecting what the French believed to be Britain’s real motive. These fears had, 24 years previously, been a major factor in President de Gaulle’s rejection of the UK’s first of three attempts to join the six members of The Treaty of Rome that is now the 27-member European Union. In its 45-year membership, Britain has been remarkably unsuccessful in achieving Sir Humphrey’s objective; the excessive growth of Brussels’ supra-national power was a major reason for 2016’s successful British referendum vote to leave – to ‘Brexit’. Whether Britain’s desire to reclaim so much of its lost sovereignty will be a precursor to other national departures – and so reward Sir Humphrey’s prescience – may well depend on how satisfactory the divorce turns out to be. Brussels is determined to ensure that the terms are harsh enough to dissuade others. Australia has a significant interest in the nature of the settlement, and not simply for our trading opportunities with a post-Brexit Britain which wrongly receive exclusive focus in official circles. Far more important are the less tangible cultural/social/political links to the British well from which our national identity was drawn.

Britain’s joining the EU in 1973 marked the formal end not only of a major Australian-UK trading relationship, but also of significant non-tangible links. Australians were no longer the particularly welcome visitors denoting a special relationship. Suddenly, Australians were foreigners joining the (long) non-EU queue at immigration; as the son of a naval officer who died as a result of fighting for King and country and of a mother born in Durham, I queued, irritated, as his former enemy, Germans, strolled through the customs barrier unhindered. Unsurprisingly, the proportion of Australians travelling overseas who head for Britain dropped from 30 per cent to its current six per cent.

So much for maintaining links between Australia and ‘the mother country’. And when, after leaving parliament in 1996, I determined to beat this system (and get easy access to Europe) by seeking a British passport by virtue of being the son of a Pom, my request was rejected. Passport entitlement was for patrials, not matrials; but had my mother not been married at the time of my birth in 1930, she would have counted as both mother and father for the purposes of this sexist section. When I mentioned that she had often in my youth called me ‘a little bastard’, I was told this was insufficient evidence.

So one essential consequence of Brexit must be the end of this personal discrimination against Australians; Britain will need a post-Brexit rediscovery of its all-but abandoned Anglosphere – especially its thriving former colonies.

For Australia this means not just trade; a restoration of closer links aimed at reinforcing Australia’s maintenance of its British heritage is needed as we steadily drift further apart.

The former Governor of the Reserve Bank, Glenn Stevens, underlined the significance to Australia of its British heritage in a speech five years ago:

‘It was not just money, land and minerals that made Australia. Our British heritage was of higher value. Things like a language that is understood virtually anywhere, common law and parliamentary democracy, property rights and governance. Britain invested in and traded with her former colonies rather than simply extracting the rents and it is not a coincidence that English-speaking former colonies are among the world’s richest. The ties that bind are not just history (nor the Crown or the world’s smallest sporting trophy). We share an outlook on how our economy should be organised and governed, on the role and limits of markets in setting prices and allocating resources. We share a commitment to a world economy in which trade is free and capital is free to move… Perhaps the most important thing Australia and Britain have in common is the strong belief that societies prosper when policies are debated in an open way, where evidence, reason and judgement can be brought to bear on decisions and where accountability and evaluation are key attributes of the process. But in the agenda for reform we need to contain the growth in the regulatory agenda and respond only to the most important calls.’

On almost every score, Stevens’ catalogue is now at serious risk. As Australia undertakes remarkable changes, with a quarter of its population born overseas, many of them from countries with no history or recognition of the centrality of our British inheritance, particularly the democratic process, the need to defend the British traditions that distinguish our nation, is becoming urgent. Freedom of speech is under attack from governments (Section 18C) and their agencies (like the Human Rights Commission). The trashing in our current political climate of Stevens’ ‘British’ requirements that policies be debated in an open way and decisions be based on evidence, reason and judgement, accounts for the present low opinion of our political class (and a rising disdain for democracy shown in opinion polling) and is further evidenced by the shouting-down of contrary views in our universities. Britain’s rediscovery of the significance of the lost sovereignty that it is now seeking to recover should reinforce Australia’s determination to resist the leftist trend to bow to international conventions and agreements that subvert our right to govern ourselves in accordance with the British traditions we inherited.

But all this gets scant political attention in our parliament, where Brexit is seen through the lens of a Joint Parliamentary Standing Committee enquiry into the trade consequences of Britain leaving the EU. Its interim report, which predictably notes that it cannot make conclusions until Brexit’s terms are eventually settled, details what our trade with Britain and the EU has been and what it might become if and when free trade deals are done with either of them. But one thing is clear: there is no prospect whatsoever of Australia returning to its old dependence on Britain as its major export market when trade was dominated by agriculture. In reality, post-Brexit Britain may need our agricultural products as potentially cheaper replacements of expensive (and subsidised and quota-protected) European food more than Australian exporters need a re-opened British market.

Australia has long since found other better markets closer to home for everything it sold to Britain under the old Empire preference system that disappeared when Britain joined Europe. Back in the 1960s, the rural sector provided just under half of Australia’s exports to what was then our biggest market. But Britain’s share of our exports has fallen from a quarter to only one per cent. When Britain gave up Australia for an entry ticket into Europe in 1973, the overall impact on Australian trade had been minimised by the diversification that had quickly followed Britain’s first attempt to join in 1961-62, when it clearly indicated that it was ready to sacrifice the Commonwealth. But there was some disruption; Australia’s dairy industry suffered a major hit with dairy herd numbers cut by 40 per cent from four million to 2.4 million as butter exports collapsed by 90 per cent  from 79,000 tonnes (mostly to Britain) to only 7,000 tonnes. Canned fruit was a victim and Tasmania was shattered by the two-thirds cut in apple exports that resulted in government-funded tree-pulling.

Apart from these problems, Australia’s successful trade diversification into the Pacific rim meant that the Europeans felt justified in asserting that there was no need to make any concessions to an ‘undeserving’ Australia that was  ‘too far away, too rich and stable enough to fend for itself’. And the Europeans were being secretly encouraged by the US to take a tough line against Britain retaining any trade advantages with Australia and Canada in order to kill off what was left of the Empire preference tariff regimen that disadvantaged American exports to Commonwealth markets. Australia’s need for US investment had prompted the traditionally pro-British Menzies government to respond to US pressure by seeking in London an easing of Empire preference. Britain saw this as the writing on the wall, sparking British interest in joining a Europe it had previously foresworn.

The 12-year breathing space given by President de Gaulle’s rejection of Britain’s 1961-2 bid not only provided Australia with time to diversify, it also ensured that Britain would not be able to influence, on behalf of its Commonwealth food suppliers, the final stages of determining the nature of the Common Agriculture Policy – particularly its absurdly high subsidised price levels that not only protected uneconomic farms but also produced surpluses that disrupted international markets. The average German dairy farm was jokingly said to consist of 20 cows and a Mercedes. And the huge cost of maintaining these subsidies was defended as being cheaper than the cost of fighting the traditional wars between themselves. While Ted Heath’s unsuccessful 1961-2 bid for Britain to dump the Commonwealth and join the Common Market may have been, for economists, “a salutary shock Australia needed”, resentment and a sense of betrayal at the time were paramount. After returning from Brussels as the only Commonwealth correspondent covering the bid, I wrote in Quadrant: “They don’t call them Poms any more in the Department of Trade in Canberra – not even Pommie Bastards. Now it is “the Brits”, a harsh far more impersonal word that avoids the friendly almost affectionate familiarity of Pommie. This new word for the British reflects fairly well the new look in Australia’s trading relations with Britain”.  But Ted Heath blamed his 1961-2 failure to join Europe on the incubus of the Commonwealth, which domestic UK politics required him to protect – a situation long-since gone. Nevertheless, despite its much diminished significance, Britain is still our six largest trading partner (albeit a tiny fraction of China, Japan and the US) and our second-largest source of investment.

Whether our trading links pick-up will depend not only on whatever Brexit deal emerges from Brussels, but also on the direction Britain intends to take; will it be politically acceptable to cut back some of Ireland’s dominance in meat exports to Britain in order to increase supply from Australia – or will South America get the nod? If the EU’s deadly (and costly) import quotas end, will British consumers revert to the cheaper Australian products they used to prefer  — and will our British wine sales boom even further with the end of costly protection for EU wine? Nowadays, trade bears no relationship to the cultural links between countries; Australia is a very different nation from its main customer China and will hopefully remain so. But when Britain joined the Common Market 43 years ago there was an evident diminution in the ties that bound us together. If they cannot be at least partially restored by the symbolism of Brexit in representing Britain’s rediscovery of its Commonwealth, the battle to retain in an evolving Australia those British traditions that underpin our national identity will surely be lost.

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