Friday, March 24, 2017

Richard Cullen's Australian Perspective on Brexit (SCMP)

Richard Cullen
South China Morning Post
23 March 2017
The claimed consequences of Brexit, good and bad, have been the subject of much debate. In fact, guidance from more than four decades ago on how outcomes may unfold after a major resetting of the macro-economic framework may be drawn from the repercussions of “Brentry”. Britain entered the forerunner to the EU, the European Economic Community, in 1973. That decision was ratified in a UK referendum in 1975.
     At the time of “Brentry”, Australia had a significant manufacturing sector, which made everything from textiles, toasters and motor vehicles to trains and agricultural equipment. This sector operated behind high tariff walls and other protectionist measures. Meanwhile, as a commonwealth country, Australian primary produce enjoyed favourable access to the UK market.
     Those preferences were swept aside with “Brentry”. Australian butter exports to the UK plunged by around 90 per cent and apple exports declined by over 60 per cent in the years following 1973. The paramount initial experience of “Brentry” in Australia combined cultural and economic shock with a mood of deep concern about the future... Click here to read the full article, which provides a synopsis of a longer essay entitled "Lessons From Brentry". This essay can be downloaded here. It explores the issues in more depth and addresses questions not dealt with in the SCMP article - but which arise from it.

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