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21 June 2016

British Influence: Brexit - the Commonwealth Dimension


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The report demonstrates just how wrong Leave's campaign contention over placing the Commonwealth as the UK’s chief lever of influence in the world is, not only due to the economic and geopolitical pitfalls, but ultimately because the nations of the Commonwealth want the UK to remain in the EU.


The Brexit clamour for British free trade with the Commonwealth is being amply satisfied by the EU. Negotiations are taking place, or have already been completed, with all but five Commonwealth countries, and three of these already benefit from reduced or zero quotas and tariffs on their exports. Without the EU, a British dream of comprehensive free trade with the Commonwealth would be much further away, and far less attractive to Commonwealth countries.

The EU is the only viable route to Britain's free trade with the Commonwealth. There is no political will for a Commonwealth FTA, and little need for one. The Commonwealth's shared cultures can facilitate trade but are not its principal mediator, and the vast majority of Commonwealth economies, large and small, are focused on their neighbourhoods. Not only would a one-size-fits-all Commonwealth FTA prove an unwieldy, fiercely complicated distraction, it would also ignore the widely differing stages of economic development of Commonwealth members, levels of regional economic integration, and trade barriers. An FTA could also seriously disrupt trading relationships – particularly in Africa – which involve non-Commonwealth actors, as well as the evolving single markets of ASEAN and CARICOM.

The prospect of any bilateral FTAs between a post-Brexit UK and Commonwealth countries is remote in the short and even medium term. The fact that Germany is so often a more important EU trading partner for Commonwealth countries than the UK, demonstrates the Brexit fallacy of a Commonwealth waiting to throw in its lot with Britain. Major countries' trade negotiations with the EU could be disrupted and delayed after Brexit, but the UK will almost certainly not be a beneficiary – and indeed, could spend the next decade attempting simply to get back to the FTA negotiating positions it currently occupies.

Commonwealth countries would not prioritise FTAs with the UK alone for the same reason that they want the UK to stay in the EU – so they can have access to a market of 508 rather than 64 million people, in which their voices will be loudly heard and vocally supported. Any Commonwealth members approached by the UK would have the greater political capital and advantage, given that a separated UK would want and need to complete negotiations quickly. While the Commonwealth countries would have lost a significant proportion of the EU, the UK would have lost everything.

As a member of the EU, the UK can continue to push for trade deals that benefit the Commonwealth and open up the EU's markets, and indeed, can help to shape and improve them as well. Developing countries, in particular, will have to deal with the EU with or without the UK's involvement. It therefore remains unclear how having the UK outside such a single market will advantage Commonwealth trade at all. As Carolyn Fairbairn, Director-General of the Confederation of British Industry, put it: “Remaining in 82 the European Union and trading with some of our closest Commonwealth allies are not mutually exclusive – they are mutually reinforcing.” Truly, the best of both worlds. 

Full report



© British Influence


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