Business News President’s Focus
Earlier this year, the Chamber launched a new division, the Commonwealth Chamber. Six months later, GBCCC president Keith Stokes-Smith examines the prospects of increasing trade between the UK and the 52 other Commonwealth nations – and wonders why we are ‘ignoring the hand that once fed us’.
t is easy to assume that we all understand what is meant by 'the Commonwealth' - particularly in relation to trade - but do we all understand the significance of this organisation, and the potential it offers? There is wide agreement within
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the Commonwealth that trade is critical to economic growth, overall income and employment. The Commonwealth believes that
access to international markets presents tremendous opportunities for poor countries and that an open trading system will help increase income levels and reduce poverty. Unfortunately, although there are
52 other Commonwealth, countries, representing a third of the world’s population, only nine per cent of UK exports go to them. That’s a far cry from the 43 per
cent of 1950 - or the 17 per cent of 1975, two years after we joined the EU. A coincidence? I suggest not. Incidentally, our imports from Commonwealth countries have followed much the same trend. I can understand why business
has looked to the EU as the main destination for its goods and services, not least because of the elimination of trading barriers. The EU also has trade
agreements with a number of other countries, which eliminate or reduce many of these barriers. Conversely, when goods and
services are sold to non-EU nations, they can face barriers including tariffs, limits on the amount, and standards that are different from those in the seller's home market. However, these barriers were
there in 1950 - and despite this, we still managed to export 43 per cent of our goods to Commonwealth nations. If anything, 68 years on, exporting
to Commonwealth countries must be even easier, particularly to those now more developed. Post-Brexit, the reality is that we
need to look beyond the EU. A Standard Chartered Bank report published recently claimed that seven emerging countries - five of which are Commonwealth members (Bangladesh, Indonesia, India, Nigeria and Pakistan) - 'offer significant potential to become key trading partners' of G7.
10 CHAMBERLINK October 2018 And let’s not forget, we are only
talking about five countries here. There are plenty more out there - why let Germany, France or some other country satisfy that demand when we can? We should be focussing on those countries where there are trading possibilities, regardless of who they are. We might trade with India, for
example, not because it is a member of the Commonwealth, but because it offers good opportunities. However, the Commonwealth
nations as a group have a number of common factors, many resulting from the historic ties between us,
which result in what is referred to as the ‘commonwealth advantage’.
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n an address last year, Commonwealth Secretary- General Patricia Scotland said:
“There is a 19 per cent trade advantage within the Commonwealth. We must see how the global trade landscape can be changed in favour of that advantage and the particular factors that drive and differentiate intra-Commonwealth trade and investment be improved.” Other commentators have
suggested that this figure, made
through savings on business costs, is more like 10-15 per cent .The basis for the claim is shared history and commonalities of language, law and business practice. Whether the advantage is 10 or
19 per cent, the question has to be asked: “Why are we ignoring the hand that once fed us, the Commonwealth?” We can only look forward not
back but if the figures achieved in the 1950s are anything to go by we most certainly need to increase Commonwealth trade and the opportunities are there - the West Midlands should lead the way.
Greater Birmingham
Commonwealth Chamber of Commerce
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