Australia could do "substantially" more trade with the UK if the countries strike a bilateral agreement following Brexit, High Commissioner Alexander Downer has said.
But he warned that if the UK remains in a customs union with the EU after withdrawal, it would have no say in its own trade policy and no ability to conduct negotiations with partners around the world.
The Australian High Commissioner said that his country's experience was that reducing and removing tariffs on trade had a "substantial and very positive" impact on the economy.
Mr Downer told the BBC Radio 4 Today programme: "From Australia's point of view here's what we would like to see coming out of the Brexit debate.
"Number one, we naturally don't want to see the EU and the UK introduce a whole lot of tariff barriers between them.
"There are none at the moment, we don't want to see that introduced. That would be damaging to the European and British economies but damaging to the global economy - that's what we are worried about.
"Number two, we do want to trade with the UK, and we want to build back our trade with the UK.
"We could build substantially more trade if we were able to negotiate a free trade agreement with the UK.
"If you remain in the customs union then you would have no control over an independent trade policy. In fact you'd have no control over trade policy at all.
"Countries like Australia, China, Japan, the US and so on would not be able to conduct trade negotiations with the UK, we would only conduct trade negotiations with the EU.
"You wouldn't be relevant to that, because you wouldn't have a say in those negotiations, they would be exclusively conducted by the EU."
Mr Downer said Australia's experience since the mid-1980s showed the "huge advantages of unilateral trade liberalisation".
He said: "The fact is that it does lead to some economic restructuring, some redirection of investment.
"But having said that it contributes to economic reform, and you need a constant process of economic reform to achieve high rates of economic growth.
"It's worked for us. we've had 26 consecutive years of economic growth, partly because we've opened our market to the world."
Unilateral reduction of tariffs had "a substantial and very positive effect on your economy", said Mr Downer.
And the policy is "progressive" because it reduces the price of imported food, clothing and footwear, on which lower-income households spent a relatively large proportion of their income.