Despondency over the implications of Brexit on the UK, EU, regional and global trade, global finance and globalisation is overshadowing some interesting possibilities. These include the likelihood of the Commonwealth emerging as a major group in the global trade space.
|Commonwealth flags (photograph: Rachel Carr - Countessian.com)|
Though the majority of the group comprise Least Developed Countries (LDCs) and Small and Vulnerable Economies (SVEs) from Africa, Asia, Caribbean and the Pacific, it includes rich OECD countries (e.g. Australia, Canada, New Zealand, UK) and high-income non-OECD countries (e.g. Barbados, Brunei, Cyprus, Malta, Singapore, Trinidad & Tobago). From a geo-strategic perspective, Commonwealth member countries figure in major global forums such as the G7 (Canada, UK), G20 (Australia, Canada, India, South Africa, UK) and the BRICS (India, South Africa).
The importance of the UK in the formation of the Commonwealth is well-known. As sovereign countries that were once part of the British Empire, the Commonwealth members are connected by their common links to Britain. Britain can be imagined as the historical ‘core’ of the modern Commonwealth. Nothing reflects the centrality of Britain more to the Commonwealth than the location of the Commonwealth Secretariat in London. Post-Brexit, the Commonwealth becomes an important forum allowing Britain the scope of reformulating its international strategic and commercial relations. It offers Britain a ready platform for engaging with various regional member states –an engagement that Britain can pursue without being hampered by any legacy carried from its association with the EU.
Major EU member states have never been a part of the Commonwealth. Their interactions with the latter members have been through the EU’s interactions with regional forums comprising Commonwealth members, such as the Caribbean Community (CARICOM), Common Market for Eastern and Southern Africa (COMESA) and the Association of Southeast Asian Nations (ASEAN). Possibilities of Britain’s interaction with world member states running into friction with similar interaction of the latter with the EU hardly exist within the domain of the Commonwealth. Britain can therefore look at the Commonwealth as a platform for cultivating new ties with old partners, as well as enhancing linkages with regional forums, without the “EU baggage’.
Trade will no doubt be an important agenda in Britain’s external policies. Britain should find it easier to work out free trade agreements with other countries given that it no longer needs to operate within the regulatory framework of the EU. In this regard, the Commonwealth again becomes significant. Both Britain and the Commonwealth stand to gain from a common vision on trade that would see the former entering into trade and investment alliances with Commonwealth members, through bilateral agreements with groups of the latter as well as individual countries. An India-UK bilateral FTA, or a UK-South Asia FTA, could well be on the cards following deeper engagement of the UK with Commonwealth members.
A Britain keen on shaping itself as a major global actor in the modern world, and looking at the Commonwealth as an opportunity for doing so, has implications for global trade. These include the emergence of the Commonwealth as a global body espousing an inclusive trade agenda. International trade policy, particularly mega-RTAs, are being seen by many as vehicles dedicated to serving interests of specific businesses, policy elites and geo-strategic objectives. Such perceptions are resulting in popular opinion mounting against mega-RTAs like the TPP and TTIP.
|London at night (photograph: hdwallpapers.in)|
Engaging with the Commonwealth can be an effective way of signalling an ‘inclusive’ trade policy. The Commonwealth, for all practical purposes, is a mini-WTO. Developing a trade agenda with Commonwealth nations as partners will require Britain to accommodate as much flexibility as it would have to in its negotiations at the WTO. For Commonwealth members, particularly the low-income developing countries, Britain can be a good beginning for embarking on trade negotiations that would reflect some of the 21st century issues featuring in the US and EU FTAs, albeit with greater flexibility.
While it might be premature to visualise a pan-Commonwealth FTA, Britain could be in a position to kick-start the process. Doing so would establish its strategic credibility as a major global power keen on pursuing the agenda of inclusive trade. On the other hand, a Commonwealth FTA would enable low-income Commonwealth members to gain preferential access to high-income Commonwealth member markets without being subject to strict regulatory conditions that are being demanded in Economic Partnership Agreements (EPAs) with the EU. Britain and the Commonwealth are well poised to embark on a mutually fruitful relationship and Brexit might be a blessing in disguise for both.
[Article posted by The Financial Express]