International Trade and the Commonwealth: Just getting started
After attending CPS’s Margaret Thatcher Conference on Trade last in November, I find myself re-invigorated by international trade prospects. The conference reinforced our new course now that we are a truly independent trading nation and use our newfound freedom to once again become global champions of free and fair trade, banging that drum around the world to remind investors that there has never been a better time to invest in the UK.
It will come to no surprise that I was most taken with Lord Hannan’s speech on the Politics of Trade. He mentioned a fairly indisputable premise, if we want security, whether it be in food, PPE, components for vaccines or anything else, the way to be secure is to source whatever we need from as wide a variety of suppliers as possible, from a diverse, global group of suppliers so we are not vulnerable to a localized shock or disruption. Which is why self-sufficiency does not make us secure.
Shaping and shoring up the UK’s new trade agenda is not the only priority for the government right now but the impact this agenda will have on the commonwealth is substantial. This brings me onto the vital part the Commonwealth has the play in the future of global Britain. International trade is nothing new and Britain has historically played a leading role in advancing the virtues of international trade, but Brexit and the new trade agreements offer us an opportunity, not just for increased trade, but strengthened relations and diverse prospects for future generations.
Together, the 53 member states of the Commonwealth have the unique ability to be able to lead the defence of free trade, working together to shape new policies and approaches, showing the world a route to prosperity that lies through partnership, rather than protectionism.
UK-Australia free trade agreement
Only this month, a free trade agreement (FTA) was reached that reflects the importance of market access for services for both economies. This is the first ‘new’ UK trade deal since Brexit; the UK’s other trade agreements have largely rolled-over previous EU deals.
Australia was the UK single largest export market in the Commonwealth in 2019 - UK exports to Australia were £12 billion, around a fifth of UK exports to the Commonwealth and just under 2% of all UK exports.
The agreement removes tariffs on all UK goods exported to Australia and nearly all Australian exports to the UK, subject to ‘rules of origin’ which determine where the goods are deemed to come from. According to the Government, over £4 billion of UK exports will no longer be subject to tariffs.
British cars, Scotch whisky and confectionery will all receive a boost from the pact, with it being cheaper to export to the world's sixth biggest nation. Under the agreement, Britons under the age of 35 will be able to travel and work in Australia more freely.
UK-Canada Trade Continuity Agreement (TCA)
Canada is currently the 9th largest economy worldwide, offering significant opportunities for UK businesses in industries including automotive manufacturing and food and drink. The UK is Canada’s most important commercial partner in Europe. Two-way merchandise trade in 2020 reached $27.8 billion.
the Canada-United Kingdom Trade Continuity Agreement, based on the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union, entered into force on April 1, 2021 - an interim deal that will be in place as Canada and the UK work towards negotiating a comprehensive free trade agreement. The Trade Continuity Agreement preserves preferential market access, based on CETA, for both Canadian and UK businesses.
This next generation of trade deals will be better tailored to the UK economy and provide the opportunity to set new benchmarks in areas like digital trade, climate and women’s economic empowerment.
Here at CF Commonwealth, we’re excited to see how negotiations progress and look forward to working with our dear friends across the pond more than ever.
This enthusiasm as been replicated by our work with Canadian MPs past (former Prime Minister Kim Campbell, former Former Minister of Foreign Affairs of Canada) & present in Mike Lake, Michael Chong.
New Zealand Trade Deal
This comprehensive trade agreement with New Zealand will cut red tape for businesses, end tariffs on UK exports and create new opportunities for tech and services companies, while making it easier for UK professionals to live and work in New Zealand.
After 16 months of talks by Department for International Trade negotiators, the ground-breaking deal was made. Tariffs as high as 10% will be removed on a huge range of UK goods, from clothing and footwear to buses, ships, bulldozers and excavators, giving British exporters an advantage over international rivals in the New Zealand import market - a market which is expected to grow by around 30% by 2030. High-quality New Zealand products loved by British consumers, from Sauvignon Blanc wine to Manuka honey and kiwi fruits, could be cheaper to buy.
UK workers will benefit from improved business travel arrangements and professionals such as lawyers and architects will be able to work in New Zealand more easily, allowing UK companies to set up shop and bring the best British talent with them. Both sides have also committed to a mobility dialogue outside the trade agreement that will consider how people-to-people links can be deepened further.
This has been reinforced with the work we have done with New Zealand National Party MPs including our patron Simon Bridges and Simon O’Connor.
The Commonwealth is a trade bloc of countries with historical ties, long-established economic relations, similar administrative and legal systems, and facility with a shared language.
There will need to be dozens and dozens of trade agreements to make a dent in the loss of EU trade caused by Brexit, but Commonwealth nations are there to fill the hole.
Here at CFOC, we look forward to continuing our work across all 54 member countries within the Commonwealth, ensuring the recognition of the significance of the role of the Commonwealth and its values as part of Britain’s post-Brexit identity.