Cultural and economic advantages and disadvantages

Introduction

Trade and investment with the EU has benefited Australia's competitiveness in the global economy and reinforced its political, immigration and cultural links to Europe. The combination of trade with existing historical and political ties has encouraged the two parties to collaborate on projects tackling security issues, including terrorism, and immigration and asylum issues. European trade has thus brought to Australia benefits in these areas and increased global influence on them. Trade has further reinforced joint development projects in the Asia-Pacific region and contributed to regional growth with its own flow-on effects for regional security and for employment and training opportunities in aid programs. The disadvantages of Australia's links to the EU are argued to result from the inequitable consequences of European competition in domestic and regional markets.

Cultural and economic advantages

A global influence

The EU is not just Australia's largest trade and investment partner but is the largest economy in the world (as at 2004), with a GDP of $17.3 trillion, nine per cent more than the United States ($15.9 trillion), almost three times that of the next largest economy, Japan ($6.3 trillion), over seven times the size of China ($2.2 trillion) and almost 22 times the size of the Australian economy ($0.8 trillion). It is also the largest international trading bloc in terms of two-way trade, and the world's largest exporter of merchandise goods (exporting $1.6 trillion in 2004, or 18 per cent of global exports), compared to the US (with $1.1 trillion or twelve per cent), China ($806 billion or nine per cent, Japan ($768 billion or nine per cent), and Australia ($118 billion or one per cent). The EU is the world's biggest exporter and importer of services (accounting for 27 per cent of world services exports and 25 per cent of imports in 2003), and the world's second largest importer of merchandise goods (with $1.7 trillion worth of imports in 2004 or 18 per cent of world imports) behind the US (with $2.1 trillion or 22 per cent). Further, the EU is heavily involved in the World Trade Organisation (WTO), the Organisation for Economic Cooperation and Development (OECD), the Asia/Europe Meeting (ASEM) and the Energy Charter Conference. Australia's joint involvement in these groups and dialogue with the EU on a world scale has thus provided a link and larger say in the development of global trade and investment policies that are beneficial to Australia. 

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A strategic alliance

A global environment rife with ethnic and international tension has underscored the benefits of drawing on common interests shared by the EU and Australia. The death of millions of Europeans and Australians in two world wars is a reminder that warfare is unthinkable in a European arena for either group. This common front on foreign and security policy has been bolstered by trade, with an increase in exchanges on security and strategic issues, including counter terrorism, and non-proliferation and export control issues. Dialogue has also increased on police cooperation, including exploring the possibility of bilateral cooperation between Australian law enforcement authorities and Europol.

Some strategic interests have been tied to migration and asylum issues posed by global population movement. A strategic alliance built on trade incentives has allowed practical cooperation on asylum seeker and refugee readmission to countries of first asylum and border management in third countries. It has allowed further cooperation in combating transnational crime, including people smuggling, and in tackling irregular migration, identity and document fraud with the development of border defence technologies.

Regional growth opportunities

Australia has used its EU trade links to improve the international trade environment with regard to developing countries in the Asia-Pacific. In 2003, the EU contributed $57 billion worth of international Overseas Development Assistance (ODA) or 54 per cent of total ODA. The two groups have been able to engage in development cooperation programs in areas of mutual interest. The Joint Declaration on Relations between Australia and the European Union (1997) has outlined such areas as the rebuilding of East Timor and the Solomon Islands, and of good governance and economic growth in other countries like Papua New Guinea. The two have been further able to provide support and funding for the Asia-Pacific Leadership Forum on HIV/AIDS and Development. Trade and its facilitation of the funds used in these efforts has benefited regional growth with significant flow-on effects for improved regional security and for employment and training opportunities in aid programs.

European culture

Almost 90 per cent of Australians claim European ancestry and over 40 per cent of the 4.5 million Australians born overseas were born in the EU. European ties date back to British settlement of Australia in 1788 and to the steady stream of Europeans since then looking for a life in the great southern continent. Immigration following the Second World War has seen Australia and Europe develop broader social and cultural ties reinforced by common democratic values. Since Australia's colonial relationship has weakened and the number of European migrants has declined, an economic partnership remains the mainstay of this relationship. Indeed, former European Commission Vice-President Sir Leon Brittan remarked that 'The thumping heart of [Europe and Australia's] relationship will remain economic'. A strong economic link may help preserve Australia's historical, social and cultural ties to Europe.

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Cultural and economic disadvantages

Possible threats to regional integration and development

Some non-government organisations (NGOs), including the Pacific Concerns Resource Centre (PCRC) in Fiji, have criticised the EU for its 'heavy economic and political pressure' to open up markets in developing countries in the Asia-Pacific. Such groups argue that Australian-EU development cooperation is focused more on eliminating trade barriers than on economic development. Concerns are over the threat this poses to the process of regional integration and over unfair European competition in domestic and regional markets, causing food insecurity, social inequality, and losses of public revenue with the elimination of import duties. These issues may impact negatively on Australia's links to this region if such fears are well founded.