This is Britain’s moment for an ambitious Commonwealth trade deal

 
Molly Kiniry
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CHOGM London 2018 - Day 1
Instead of limiting ourselves by considering only what makes economic sense today, we should seek out those partnerships which will deliver more serious returns tomorrow (Source: Getty)

The Commonwealth Heads of Government Meeting (CHOGM) currently underway is the perfect petri dish for the start of trade talks.

These 54 heads of government, plus business representatives from each country, can say with authority (and this week, in privacy) what they would need to make a Commonwealth free trade agreement (FTA) happen.

The Commonwealth has not historically been a trading organisation, and at present its members are bound only by the bilateral agreements they have independently signed with one another. But Brexit presents the opportunity to rethink its strategic value as an organisation which covers five continents and billions of people.

Read more: The Commonwealth could hold the key to Britain’s post-Brexit success

A Commonwealth FTA is not, in short, a Brexiteer fairytale.

This is not to say that it would be easy to achieve. It would be challenging to negotiate and would almost certainly not cover the higher-level services issues that are most valuable to the UK. But it is still worth doing.

Some of the highest-standard FTAs in the world (such as the Trans-Pacific Partnership) began largely as strategic exercises – “because we can” is considered totally valid logic for trade policy. Pushing the bounds of these agreements further is worthwhile, even if the initial economic impact is low.

That a Commonwealth FTA would be largely symbolic at the moment matters very little – especially when one considers the rate of growth expected for the developing members of the bloc, like India and Nigeria, in the coming decades.

Cementing that trading relationship now, with the intention of deepening it later, just makes good sense.

Moreover, announcing our intent to negotiate such an agreement would show the UK’s seriousness in engaging with the developing world post-Brexit – there is a great deal of overlap between Commonwealth member states and lesser-developed countries.

As an EU member state, the UK has been bound to the same external trading arrangements as everyone else – and for the developing world, those arrangements have come in the form of “preferential” trade agreements.

These agreements offer reasonably good access to the domestic European market, rated against how poor a country is and how good we perceive their governance to be. Sign up to international labour conventions, and you can keep your preferences. Displease your benevolent partners in the northern hemisphere, and those preferences might be cancelled entirely.

Needless to say, this is not how trade agreements are framed between equals.

This is both deeply patronising, and easy to fix.

The primary value of a Commonwealth FTA would be proving that this modus operandi is unnecessary and outdated – it is entirely possible for OECD countries to trade with lesser-developed countries on equal footing. Even if the relative strength of these economies is not equal, there is no need to formalise that inequality in legally binding agreements – especially when we know that improved trading ties are likely to reduce poverty in the poorer member states, while providing new markets to the wealthier ones.

Neither trade nor the eradication of poverty are zero-sum exercises.

A Commonwealth FTA, even one that was initially simple in its aims (say, covering goods only), would serve to disprove this dangerous narrative, and provide a more stable footing for investment than the time- or policy-limited treaties which these countries are currently offered.

This is precisely the sort of role many countries hope that Britain will play in the coming years. With limited resources at the government’s disposal, some have advised that we not run too far or too fast towards an ambitious sovereign trade policy. This would be foolishness in the extreme; at this juncture, the UK cannot afford to be unambitious.

Instead of limiting ourselves by considering only what makes economic sense today, we should seek out those partnerships which will deliver more serious returns tomorrow.

Read more: London can lead the Commonwealth to more trade, investment, and innovation

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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