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Quick trade deal with UK? Forget it.

By Colin Chapman

Scott Morrison and his treasurer Josh Frydenberg would be well advised to recant Government statements that they are ready to negotiate a quick free trade deal with the United Kingdom. Readers may remember that when he met Britain’s prime minister Boris Johnson on the fringes of the G7 summit in Biarritz, Morrison unwisely suggested a deal could be nailed down in less than a year.

I’d like to think we could move quicker than that”, he told reporters in the French Atlantic resort.  “Australia, I think you’ll find, will be pretty fleet-footed.” This is rubbish; the PM’s hope of getting a quickdeal is about as great as the Australian cricket team physically being able to bring the Ashes urnback from its locked cabinet at Lords in London.

It’s questionable whether the Australian public either know or care about the prospects of an FTA with Britain. Morrison’s optimistic talk and extravagant statements by trade minister Simon Birmingham and New South Wales premier Gladys Berejiklian (after both had been ear-bashed by Lynn Truss, Johnson’s trade negotiator) may have encouraged Australian primary industries and service sector companies to anticipate a boost in exports.

Ms Truss’s predecessor Liam Fox visited Australia before being dumped as international trade secretary when Johnson became prime minister, and has spent a year in negotiations with Australia, breaking the rules of the European Union. However, most of the important issues remained unresolved when Ms Truss took over, obediently reiterating Johnson’s slogans of ‘Global Britain’, that would leave the European Union, ‘do or die’, on October 31.

But the UK will not be leaving the EU on October 31. On September 9 Royal assent was given to a cross party bill forcing the British prime minister to seek an extension to EU membership for three months beyond October 31 and barring a ‘no-deal Brexit’ before that date. The bill was supported by 21 Conservative MPs, who lost the Tory party whip after they voted against the government. They included three former cabinet ministers, two former chancellors, and the grandson of Tory hero Winston Churchill.

Also on September 9, the Commons refused for the second time in a week Johnson’s bill to call a general election on October 15. Johnson has said he would rather “die in a ditch” than agree to an extension of EU membership. Such obduracy is meaningless. Johnson’s behaviour in recent days, including proroguing Parliament until October 14, and losing the Tories’ majority in the House of Commons, have backed him into a corner. He has several options: to eat his words and seek an extension; to resign as prime minister; or to give up some of his ‘red-line’ conditions and try and conclude a new withdrawal deal with the European Union that will satisfy not only Westminster but also the 27 remaining EU countries. 

After the September 9 talks in Dublin with Ireland’s prime minister, Johnson conceded that a no-deal Brexit would be harmful to Britons and best avoided. He insisted he would conclude a deal by October 17 when the 27 meet to decide Britain’s future. However Amber Rudd, a senior Cabinet minister who added her name to the growing list of defectors on Sunday, told the BBC she saw insufficient evidence of enough effort to negotiate a deal and that, on asking the PM for a progress report she was sent a one page summary.

A no-deal Brexit on October 31 is no longer an option and the prospect of a new agreement is unlikely. The EU may agree to a three month extension but Europe’s strongest leader, Emmanuel Macron, president of France, favours a binding  two year extension, which effectively keeps Britain in the EU.

Either way, there will be no early trade deal with Australia or, for that matter, with the United States. As the Irish prime minister Leo Varadkar pointed out to Johnson, a withdrawal agreement is precisely what its name suggests and is only the prelude to what inevitably be long and difficult trade negotiations between the UK and the EU, expected to take more than a year.

Before then, there will be a UK general election, but not before mid-November. The Opposition parties will campaign for Britain to remain in the EU if they cannot secure a satisfactory agreement with the new EU team that takes over on November 1. They are then pledged to put any agreement to a second referendum, giving voters the choice between any such agreement and ‘remain’. 

Only if the Tories form a pact with Nigel Farage’s Brexit Party and win a November election could a no-deal Brexit be achieved, but then the inevitable divorce negotiations between London and Brussels start all over again and take even longer to complete.

The message Scott Morrison should be conveying to his Coalition is to forget about a trade deal with Britain. Negotiations are unlikely to take place until after the next federal election, so concentrate international trade efforts on securing better deals elsewhere. 

Q. Do you trust Boris?