Post-Brexit Trade and Business Implications for Australia: A Review

This report analyzes the potential post-Brexit trade and business implications for Australia, focusing on the opportunities and challenges that arise from the UK's withdrawal from the European Union. The report begins with an overview of Brexit, its background, and the key events leading up to the UK's departure. It then examines the impact on Australia's trade relationships with both the UK and the EU, considering changes in trade agreements, tariffs, and market access. The report identifies potential opportunities for Australia, such as new trade deals and increased investment, while also addressing potential challenges, including economic uncertainty and shifts in global trade patterns. The analysis covers various sectors, including services, agriculture, and investment, providing a comprehensive assessment of the potential impacts on Australian businesses and the broader economy. The report concludes by summarizing the key findings and offering insights into how Australia can navigate the post-Brexit landscape to maximize its benefits and mitigate its risks. The report also highlights the role of the Australian government in facilitating trade and investment in the wake of Brexit.

Running head: POST-BREXIT TRADE AND ITS BUSINESS IMPLICATIONS
Post-Brexit Trade and its Business Implications
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Introduction
Brexit refers to a portmanteau of the two words, “Britain” and “exit” and it refers to
withdrawing of the United Kingdom from that of European Union. A referendum was held on
the 23rd of June in the year 2016 where 51.9 percent of the people who were voting supported
the leaving of European Union. Government invoked the Article 50 of Treaty on European
Union that started the two-year process which concluded that UK would have to exit on the
29th of March in the year 2019. The deadline has been extended to the 31st of October in the
year 2019. The withdrawal from European Union have been advocated both by the left-wing
along with the right-wing Eurosceptics (Internationalaffairs.org.au., 2019). The pro-
Europeanists who spanned the political spectrum have asked for the single market. In the
present time, the EU countries which includes UK benefit from the single market of
European Union. It includes absence of the duties along with the quotas for the member states
of European Union that carries out trading across the European Union. This essay focusses on
the post-Brexit trade and its implications for business in Australia.
Britain and the European Union
Boris Johnson developed the optimistic refrain that Britain have been betrayed by the
inability of Theresa May of pulling U.K. out of European Union. Boris Johnson was able to
seal the victory in a comfortable manner and he beat the rival Jeremy Hunt with that of 66.4
% of the votes of the party members. The appointment of Boris Johnson in role of the new
prime minister have paved the path for the exit of United Kingdom from European Union by
the end of October (Ft.com., 2019). He has been installed in the highest office of Britain with
the help of the internal party machinations and he is presently responsible for delivering the
promise. Johnson is liked by the members of the Conservative Party and the work that he
carried out in Brussels has been instrumental in laying foundation for Brexit. Johnson has

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stated that he would leave European Union by stating a deal and that Brexit would not be
delayed any long.
There are certain sectors that would be hit hard in the event of UK leaving European
Union. There are some sectors that would experience biggest impact in terms of the exports
like the motor vehicles along with the electronic equipments. Motor vehicles refers to the
commodity that has highest share of the trade in between UK and the European Union. EU
can be said to be the primary export market for UK that accounts for 57.5 % of the exports of
the vehicles. Service sector refers to the sector that would be affected the most in the post-
Brexit era (Theconversation.com., 2019). It has been found that services industry comprises
around 80 % of total economy of UK. London is the financial center which can be said to be
the largest within Europe.
Effect of Brexit on Australia
The decision of Britain of leaving European Union would have consequences for the
relationship of Australia with that of Europe. The engagement of Australia with the European
Union can be said to be more than the extension of the relationship of Australia with UK. The
special trade relationship of Australia with UK dates back to the imperial preference for the
products from the Commonwealth countries. In the event of UK joining European market in
the year 1973 the trading arrangement ceased for that of Australia (Smh.com.au., 2019). The
economic co-operation in between Australia and the UK increased and this created the way
for the intensifying of the trade along with the investment relations. EU has emerged to
become a significant trading partner for Australia. EU can be said to be the trading partner of
Australia that is second largest after China. Decision of commencing the negotiations on the
FTA with EU helps in reflecting the strong relationship. Australia would have to face a
different kind of EU trade negotiator after Brexit (Abc.net.au., 2019). UK has been an

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important export market for Australia within Europe and Australia would continue to bolster
the ties with other economies of EU.
Australia can be said to be an attractive location for the businesses of Europe within
Asia Pacific region. The bilateral investment that flows have helped in facilitating
establishing of 2400 EU companies within Australia. The situation would not change in a
significant manner after Brexit. Brexit can bring about a change in the pattern of the
Australian companies that uses UK as gateway for entering EU market. The post-Brexit
Australia may prefer choosing continental state like that of Ireland. The new kind of
framework agreement would boost the expanding engagement of Australia with European in
relation to the political along with the economic issues (Winters, 2018). Australia and EU
would tackle the contemporary challenges with the help of international cooperation along
with the multilateral frameworks. After Brexit, they would co-operate with United Nations, G
20 along with the World Trade Organization. UK would have to evolve as the new global
power after leaving European Union. Brexit would erode the effect of UK in both the
regional along with the global arena (Murray & Matera, 2016). UK would have to work with
various kinds of partners along with the allies like Australia so that it can have a significant
influence.
The relationship in between Australia and the EU even in the event of UK negotiating
the exit strategy would continue to be the priority of the government. The recent government
have made efforts for ensuring that Australia features in a positive and prominent manner for
EU. Australia in the present time enjoys a constructive relationship with that of European
Union. Australia after Brexit would have to deal with the European Union which has lost the
major constituent state (Abc.net.au., 2019). EU wants to allay the fears of the fracture along
with the contagion and the leaders would want to prove that they are a strong along with a
reliable partner.

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Opportunities and challenges for Australia after Brexit
The centre-right government of Australia enjoys good rapport with Boris Johnson
who have suggested that UK should introduce the immigration system of the Australian style.
It can help in building the closer trade and the ties with that of the Commonwealth countries.
Australia and the UK can strike a deal that can ensure free flow of the agricultural along with
the business products within UK. It can create the way for the flow of the investment along
with the trade within both the directions. Getting the agreement on the sensitive products like
that of beef within the UK-Australia trade deal can take longer amount of time than it has
been anticipated. The greater access for the Australian beef within UK can prove to be more
complex and this can adversely affect the farmers within UK, Ireland along with the Northern
Ireland (Drake-Brockman & Messerlin, 2018). After Brexit, the future relationship of UK
with that of European Union and the Ireland would remain uncertain. The appointment of
Johnson as the prime minister can help in bringing new opportunity that can be instrumental
in resolving the difficult issues in between Brussels and that of London (Jacob, Graham &
Moller, 2017). United Kingdom along with the Europe should resolve the matters that can
help in strengthening their economy.
There are possible opportunities along with the challenges that can arise for Australia
after the Brexit deal pertaining to trade, investment along with the business. The exit of
Britain from the European Union would pave the way for the continuity of the bilateral
arrangements which are outside EU-Australia relationship like the Five Powers Defence
Arrangements along with Australia-UK Ministerial Dialogue. The prime minister of Australia
has pointed out to the fact that UK would not be able to negotiate the new trade agreements
with other countries till they terminate the customs union with European Union. There would
be a trade working group in between the Australia and UK that can pave the path for the
exploration of the possibilities (Winters, 2018). The Australian farmers would be able to

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benefit with the help of this deal and the services sector would also be able to make progress
after Brexit. The exit of UK from the trading bloc of European Union can help in offering
opportunities for Australia as they would be able to sell in the tariff-free market of UK.
Britain can beat European Union and negotiate the free trade agreement with various
countries. This can be instrumental in boosting the economy of Australia. The government of
Australia is prepared to focus the energy on the trade negotiations with that of European
Union. The challenges can rise on the path of Australia as after Brexit trade equation would
become very complicated. The slow economic growth taking place in UK along with the
Europe would lead to the slower growth within Australia. An indirect risk that Australia has
to face after Brexit is that the trading partners have large amount of exposure to UK
(Internationalaffairs.org.au., 2019). The reduced demand from UK for the goods from various
countries like China along with USA can pave the path for the reduced demand from China
along with USA for the exports of Australia. Brexit can help in the creation of the
macroeconomic concerns in the long term for the Australian economy. It can give rise to
increased uncertainty and raise concerns regarding the domestic and the international trade. It
can reduce the consumer along with the business confidence and be instrumental in
increasing the unemployment in the society.
Effect of Brexit on trade and investment
Nature of Brexit would assume more importance for Australia in the event of US and
China being involved in the trade wars. In the event of increase in the trade conflict, Australia
would require free trade deal with that of UK. Landscape in the present age has shifted
against Australia and they have to make the most of the present opportunities so that they can
emerge to become a strong country. Economic growth rate of the largest trading partner of
Australia that is China is declining has declined in the present time. The global trade has
become uncertain owing to the US- China trade war and Australia can take the opportunities

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that ca aid in its economic growth (Theconversation.com., 2019). Australian government has
stated that it would make the plans for striking the multi-billion dollar trade deal with that of
UK inspite of the uncertainty of future of Brexit.
The agreement that Australia has with UK along with the EU can be renegotiated after
the Brexit. Brexit can help in strengthening the economic tie that Australia has with UK that
would not have been possible in the event of UK remaining within the European Union. The
Prime Minister of Australia can collaborate with the New Zealand that can set the stage for
negotiating the trade after Brexit (Ft.com., 2019). The collaborative effort can be instrumental
in increasing negotiating power of two nations. Brexit can create the way for trends towards
the nationalism that can make the countries focus on the resources of their own country
instead of looking at the resources of the other country.
Conclusion
The referendum that took place in June had 51.9 percent of people voting to leave
European Union. Boris Johnson has been appointed as prime minister and it can speeden up
the process of exit of UK from the EU. He has been put in the highest office and he has to
deliver the promise of Brexit. Australia is a location that is attractive for businesses within
Europe and that of Asia Pacific region. The bilateral investment flow that would happen after
Brexit can help in the establishing of a large number of companies in Australia. Brexit can
bring about changes within Australian companies that makes use of UK for entering the EU
market. Australia after the event of Brexit can choose continental state that can help in their
growth. Brexit can give rise to macroeconomic concerns in the longer span of time for that of
Australian economy. It can set the stage for uncertainty and raise the concerns in relation to
domestic along with global trade.

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