Commonwealth dream looms in Brexit campaign

Many Brexit champions suggest a Commonwealth is perfectly possible as an EU alternative.

Many Brexit champions suggest a Commonwealth is perfectly possible as an EU alternative.Eurosceptics campaigning for the UK to leave the European Union are keen to dismiss the idea that the move would leave the country economically isolated and bereft of trade alliances.

They point out that the UK’s links with the 53 nation Commonwealth, composed mainly of territories that belonged to the former British Empire, predate its membership of the EU.

And the Commonwealth itself is eager to stress the trade advantages that its members enjoy by virtue of belonging to the association.

But even while continuing to be an EU member, the UK is already making great efforts to trade with the Commonwealth’s most dynamic economies.

With the eurozone currently beset by economic troubles, some commentators feel that the UK should turn away from its stagnating neighbours in favour of broader global trade pacts.

They are assisted in this view by statistics such as those produced by the organisation World Economics, which has a growth tracker showing that the Commonwealth has already overtaken the eurozone in its share of world economic output.

“The Commonwealth accounts for 2.6% more than the eurozone in terms of world GDP share,” states World Economics. “Economic growth in the Commonwealth has accelerated over the post-1973 period in sharp contrast to the EU.”

As the Commonwealth’s own website says, “Our countries span Africa, Asia, the Americas, Europe and the Pacific and are diverse – they are amongst the world’s largest, smallest, richest and poorest countries.

In fact, just six Commonwealth countries account for more than four fifths of all trade conducted by the organisation’s members. Apart from the UK, they are Australia, Canada, India, Malaysia and Singapore.

Earlier this month, the UK and India signed commercial deals worth £9 billion during a visit to London by India’s Prime Minister Narendra Modi – a visit seen as giving an important boost to the UK’s relations with the world’s fastest growing large economy.

Other big Commonwealth economies are not badly placed either. Some Conservative MPs, including Boris Johnson, feel that the UK “betrayed” countries such as Australia when it joined the EU in 1973.

“We share an extensive economic, trade and investment relationship,” says the Australian government website’s country brief on UK relations, before going on to list the evidence.

Investment is particularly strong: the UK is “the second largest source of total and direct foreign investment in Australia”, while Australia returns the favour, with the UK also being “Australia’s second most important foreign investment destination”.

For its part, the Commonwealth stresses that countries benefit economically from belonging to the club. According to its Trade Review 2015, members’ combined exports of goods and services amounted to $3.4 trillion in 2013, “which is about 15% of the world’s total exports”.

“When both bilateral partners are Commonwealth members, they tend to trade 20% more, and generate 10% more foreign direct investment inflows than otherwise,” says the review.

“This ‘Commonwealth effect’ implies bilateral trade costs between Commonwealth partners are on average 19% lower compared with those for other country peers.”

December 22, 2015  Tags: , , , , ,   Posted in: Business Development, Business Exports, Business Growth, Business Survival, Business Win, Exporting Businesses, Global Business, Global Businesses, Growing Economy, Uncategorized, Winning Businesses

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