Global free trade: the Australian connection with Ireland

The Society for International Affairs welcomed Australian Ambassador, Richard Andrews, to discuss commerce in regards to the EU free trade agreement

His Excellency, Richard Andrews, Australian Ambassador to Ireland, made a visit to Trinity on Monday where he spoke of the shared heritage between Ireland and Australia with SOFIA Chair, Koloman Marschik. Beginning on a light note, he gave his definition of a diplomat: “he who reminds the citizens of his posting that they are at the centre of the world, while reporting back to his home country that he understands they are not so, all the while reminding his home country that they are also not so.”

Andrews, a thirty-year veteran of Australia’s Department of Foreign Affairs and Trade, has been at the Irish Embassy since 2016. During that time he has served as patron of the Irish-Australian Board of Commerce and, fittingly, it was commerce that he was there to talk about. Australia has already passed through two rounds of free-trade negotiations with the EU, with the next round due in March. These negotiations are proceeding quickly, he told the audience, both by the standards Australia has experienced in its negotiations with its Pacific neighbours and by the standards of other countries in their own negotiations with the EU. This deal will be yet another feather in the cap of the isolated nation that has already negotiated free-trade agreements with Canada, Japan, and the Republic of Korea.

When Andrews arrived at the Irish Embassy in 2016, it had been over 10 years since any Australian cabinet minister had made a state visit to Ireland. The bond between the two countries, strong as it may be, had been neglected.

Despite this prolific free trade, Andrews was careful to stress the particular importance of Australia’s relationship with Ireland. The strength of connection is unlikely, he said; this bond between a small economy and a medium one, both almost as far away from one another as geographically possible. It is based, then, on shared values: a strong commitment to the rule of law and human rights, strong agricultural exports, a belief in alcohol (one of the largest exports in both directions), and a desire to preserve international rules that shield smaller nations from exploitation by the greater powers. Australia’s infrastructure was built by Irish convicts, themselves watched over by Irish soldiers. It is of no surprise, therefore, that there are 2.5 million Australians who profess Irish heritage. Additionally, there are currently over 100,000 Irish-born people living in Australia, many of whom immigrated during the 2008 financial crash. In recent years, Australia has issued over 280,000 student visas to young Irish adults and only 180,000 to those from France, a country with a population nearly 14 times larger than our own.

Yet when Andrews arrived at the Irish Embassy in 2016, it had been over 10 years since any Australian cabinet minister had made a state visit to Ireland. The bond between the two countries, strong as it may be, had been neglected. The reason for this, he reckoned, is an unassuming combination of great distance, shared values, and a stable global environment. At such a remove, when there are no problems to be discussed, it seems that international relationships can stagnate. Accordingly, today’s turbulent global environment, along with shared values and great distance, provides great opportunity for increased relations between the two countries, both of whom seem likely to have their agricultural exports shaken by Brexit. Capitalising on this opportunity, however, will require attention from decision-makers in both Ireland and Australia, and it has been Andrews’ mission to foster this partnership. Now, he said, the level of attention being paid to the relationship by decision-makers is at its highest point in 50 years. In 2017, both countries celebrated the 70th anniversary of their diplomatic relations, which saw a historic meeting between foreign ministers Judie Bishop and Charlie Flanagan.

Andrews emphasised how Australia could serve as a “southern anchor” for EU trade investment presence in the Indo-Pacific region, providing an easy bridge into unfamiliar Asian markets. He also made sure to note that opening the EU to Australian investment wouldn’t erode competitiveness due to the large trade deficit currently run by Australia at €44bn in EU imports compared to a mere €14bn in exports to the EU. He dispelled the notion of Australia being an agricultural superpower, remarking that the EU exports far more agricultural products to Australia than Australia does to the EU. Indeed, Andrews sees the whole equation around agriculture changing significantly in the next 20 years; the EU is more than self-sufficient when it comes to food, whereas the Asian markets accessible to Australia are growing incredibly quickly and are beginning to consume beef and dairy on a large scale for the first time. Unconcerned with bilateral trade deficits, Australia puts more stock in its relationships with overseas trading partners such as Ireland, working together to multiply each other’s interests in third markets such as China.

Brexit will make Ireland the only significant English-speaking common-law country in the EU, and therefore an attractive prospect to Australian firms.

Responding to a fastball question on the detrimental environmental impact of the free-trade agreement, Andrews unpicked the assumptions underlying the accusation. Trade does not always involve the movement of goods, he said; indeed, prospective trade between the two countries has greater advantages to the services sector. The agri-tech industry, in particular, is ideally suited to Australian-Irish collaboration as the disparity between the two countries’ daylight hours would allow for a 24-hour research pace. The opposite timing of respective growing seasons would also allow for two seasons’ worth of research to be implemented in one year; a feat that would be impossible if the two countries occupied the same hemisphere. Improvements in this sector would contribute to an overall reduction in carbon emissions. Australia and Ireland are very efficient agricultural producers; both have committed themselves to making their beef industries carbon-neutral. Andrews also stressed that the environmental impact of trade depends on individual transactions and the incentives therein, giving as an example aluminium ore being shipped for smelting to a country that obtains its energy unsustainably a trade agreement may lead the ore to be shipped to a country where the smelting process is carried out in a more environmentally responsible fashion, thus cancelling out the greater carbon footprint of shipping. He then drew attention to both Ireland and Australia’s commitment to the Paris accords, and the EU’s desire to see trade between Paris-agreed nations.

Conversely, Ireland contains many traits making it the perfect “northern anchor” for Australian investment in Europe. Brexit will make Ireland the only significant English-speaking common-law country in the EU, and therefore an attractive prospect to Australian firms. The old way of entering the European market invariably used to be opening an office in London and trading from there, but in the aftermath of Brexit, companies have realised the dangers of tying up all their risk in one market. Additionally, both countries’ economies contain a large proportion of small and medium enterprises – even domestically, our larger companies are medium-sized when compared to the corporations of Germany and Japan. Investors on both sides of the trade agreement will thus find it reassuring to deal with similarly-sized companies; with no power imbalance, they are less easily exploited. The goodwill and cultural overlap between Irish and Australian people means that investors will be confident of their ability to operate in each others’ markets. Andrews ended his talk on this particularly positive Ireland-centric note, neatly fulfilling his very own definition of a diplomat.