The EU is trying to bypass the UK and improve its links with Australia

I was surprised, but pleased, to be invited to attend the ‘EU–Australia Leadership Forum’ in Brussels last week. The second of three leadership forums – the first was in Sydney last year – it provided an interesting window on a post-Brexit future.

The audience filled the ballroom in one of Brussels’ five-star hotels, including a lot of EU-based Australians, plus a considerable number of officials who had flown in, swapping an Aussie spring for a Belgian winter. European big guns were on show: Federica Mogherini, EU High Representative; Cecilia Malstrom, Trade Commissioner; Elmar Brok, from the European Parliament and a keynote speech from former Council president Hermann van Rompuy.

The focus is on trade and greater security cooperation

Two themes dominated: cooperation on trade and cooperation on security. Both countries stressed like-minded values, as upholders of the rules-based international order, and drew contrasts with the rogue US under Trump (with which Brexit Britain was always bracketed). Both countries are also concerned about China.

Australia is keen to see the EU get involved in security in the Indo-Pacific, while the EU wants a quick trade deal with Australia before the UK can conclude its own. The EU has fast-tracked a deal and decided to exclude a specific investment chapter to get round some of the objections to the US TTIP proposals and the ratification problems with the Canadian trade agreement.

But reaching a deal will not be plain sailing. Australia has what its Ambassador to the EU termed “high expectations” on agriculture, which has proved a big stumbling block. It also intensely dislikes the EU’s unilateral adoption and imposition on others of GDPR, and regards the EU approach to data protection as disproportionately draconian.

There are other problem areas, not least Australia’s unwillingness to take domestic action on climate change (maybe the EU–Australia trade agreement will be an early test of President Macron’s commitment to the Paris commitments as a condition of trade deals). But the general mood was one of optimism for a relatively early agreement, to complement the recently agreed deal with Japan.

Cutting out the middle country

Brexit was the undiscussed elephant in the room. The statistics for EU–Australia relations show the pivotal role the UK plays as the middleman in the relationship. The key export market for Australian goods; the largest recipient of Australian foreign direct investment.

Twenty years ago, Australia thought about negotiating an FTA with the EU – and decided it was not worth the effort. But now, with the UK disappearing as a bridge into the Single Market, there is an impetus to deepen direct relations.

It may just have been the invitation list for the Forum, but not one of the Australian participants articulated the ‘Brexit as opportunity’ narrative that we hear in London from former High Commissioner Alexander Downer and former Australian Prime Minister Tony Abbott.

The Forum was an early illustration of the battle the UK will have after Brexit to keep its influence – something which Foreign Office Permanent Under-secretary Sir Simon McDonald referred to in the summer. The UK will adapt to Brexit – but the rest of the world may be able to move faster to create new post-Brexit relations.