Following Australia's Trade Minister, Steven Ciobo, meeting with the UK counterpart, Secretary of State for International Trade, Dr Liam Fox, an agreement was made to establish a bilateral Trade Working Group that will focus on scoping out the parameters of a future FTA.
So what does this mean for international investment and trading opportunities? In short, the UK and other EU countries remain key investment partners.
The reality is that UK businesses have $76 billion in direct investments in Australia and new opportunities will now emerge.
Tourism will continue to play an important role in underpinning this trading relationship. There were 700,000 British visitors to Australia last year spending almost $4 billion. The UK Office for National Statistics reports that over 600,000 Australians visited the UK in 2015-16 spending more than one billion pounds (more than A$2 billion).
Australian business can capitalise on the relatively greater certainty global investors face investing in Australia. Diversified sources of capital helps Australia maintain its reputation for resilience and adaptability to global economic change in addition to a resilient economy coupled with strong and stable financial institutions.
The 10 to 15 per cent post-Brexit depreciation of the GBP against all major currencies makes for some opportunistic investment.
Uncertainty abroad could enable Australia to increase its share of global technology investment portfolios. The Australian financial services industry is poised to benefit from any global banking and financial services restructuring, along with related technology investment trends. Fintech opportunities will be of particular interest here.
The terms the UK negotiates with the EU, and the parameters of its trade policies, including tariffs and services commitments, as an independent WTO member, will provide the negotiating context for any future bilateral deals.
In summary, The UK’s decision to leave the EU, presents opportunities for a number of markets to strengthen their bilateral relationship with the UK and Australia is well positioned to do so.