Tuesday, June 28, 2016

The British have spoken, but hard work lies ahead

The British people have spoken and they chose Brexit.  The result is the most important victory for freedom and democracy since World War II.

Once again the UK pollsters were proved wrong and this time the bookies were as well.

The Brexit vote is claiming scalps.  Prime Minister David Cameron will go in October, if not before.  Labour leader Jeremy Corbyn is clinging on, but the rupture between the progressive Labour MPs who campaigned to Remain and their working-class base who voted to Leave means the party is facing an existential crisis.

It's fair to say there is a rising anti-establishment sentiment in the UK as there is in Australia and the United States, but Friday's result should not be interpreted as a triumph of bigots over the tolerant;  isolationism over internationalism.  The Brexit result is a clear rejection of an unelected bureaucracy over democracy, a rejection of the UK subsumed into federal Europe over an independent nation.  Britain has spoken and reclaimed its democracy and sovereignty.

For Britain's leaders, the challenges over the near term are twofold.  First, how to reunite a country that is divided, not along the usual partisan lines, but on a much deeper level over the future of its institutions and democracy.

The 48 per cent who voted to Remain, including a majority of Londoners, Scots and Northern Irish, cannot be ignored.  Many are devastated, concerned about the future and how the far Right backed the Leave campaign.

The second and equally important challenge is how to negotiate an orderly exit from the EU that promotes stability and prosperity for the UK and the EU.

The unelected EU leadership is angry and wants a quick divorce.  But German Chancellor Angela Merkel is more pragmatic and will push EU leaders to behave rationally.

Merkel acknowledges the importance of Britain's economy to Europe (it's the second biggest in the EU) and likewise Europe's to Britain.  It will be in everyone's interests for a proper trading relationship to continue.

I think Britain should push for an associate EU membership, where it can enjoy economic ties with Europe without debasing parliamentary sovereignty, the British rule of law or the rights of British people.  But Britain must also look beyond the short term.  And it must begin to look beyond Europe, to Australia and Asia.

Australia's political leadership should now begin pushing for a bilateral free trade agreement.  Australia should rekindle the strong trade enjoyed between the countries before Britain joined the European Economic Community in 1973.  For Australia, there would be significant opportunities for our high-quality agriculture exports into the UK market, as well as our services industries.

Britain should also look to Australia as an exemplar of a more robust, rational and functional immigration policy.

Australia focuses on skilled migration as a source of its continued growth.  It is a win-win for migrants who can call Australia home and for the Australian economy, which can plug skill shortages and find productivity gains.  By maintaining an orderly skilled migration program in lock-step with a strong economy, Australia can also accept refugees and takes a large share through the UNHCR program.  Australia's sovereign control over its border and immigration policy means it can balance the legitimate competing concerns between our nation's economy and future with compassion for refugees.

There is no reason why Britain, freed from EU shackles, cannot take a similar approach.  This could also herald a reversal of the trend of declining Australian migration to the UK.  The traditional rite of passage for young Australians to work in the UK has been narrowed as Britain clamped down on non-EU migration.  David Cameron promised to reduce the number of migrants to Britain but his only solution was to cut down on non-EU migration, with Australian migration dropping by 40 per cent since 2008.

Finally, an independent Britain outside the EU will be free to refocus its foreign policy on its traditional allies, like Australia and New Zealand.  It will also naturally turn its focus to the engine room of the global economy, Asia.  We should encourage this shift as a Britain engaged in our region, sharing our values of democracy and respect for the rule of law, can be a significant contributor to solving the region's strategic challenges.  Most pressing for Australia is a strong international response to China's increasingly aggressive behaviour in the South China Sea.  We would value Britain's independent voice and strategic presence on this issue.

Welcome back, Great Britain.


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