Can Brexit revive Commonwealth FTA?
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I am a British expat and all of us, numbering well over 1.5 million, were allowed to vote in the 23 June referendum on Brexit. Shamefully, I didn’t—but not for want of trying. I gave up after half a day of trying to affix on to the digital form what my local UK council called a “wet signature”.
It’s interesting to see who were allowed to vote. There was nothing unusual about it: British nationals living in Britain; British expats who’ve been abroad for less than 15 years; House of Lords members (who are normally barred); and citizens of any of the 54 Commonwealth countries who are residents in Britain; Commonwealth citizens living in Gibraltar, a British colony in Spain, could vote, too.
But you couldn’t vote if you were a European, except those from Cyprus or Malta because they are Commonwealth countries. According to a UN report quoted this year by Migration Watch UK, a non-profit generally thought to advocate strong caps on migration, there are 3.3 million Europeans in Britain, including 2.1 million in work.
Given that the margin of Brexit’s win was only a million-odd votes, denying EU citizens the vote while giving Commonwealth citizens the opportunity to do so—although, and this is important to stress, this has always been the case—isn’t an entirely even-handed decision. I only mention this because, predictably, there are dark hints of a fix.
But, of course, Europeans couldn’t be allowed to vote on an outcome that would also decide whether or not they could freely enter Britain, work there, and draw on the benefits of its welfare state. But what about Commonwealth citizens? Do they have a stake in the referendum? Apparently, yes, according to those who campaigned for Britain to leave the EU.
They have been making this argument for a long time. Back in the 2010 general election, the right-wing United Kingdom Independence Party (UKIP), led by Nigel Farage—a controversial politician who has done more than anyone else to promote Brexit—mentioned India as a rising economy and advocated cultivating Britain’s traditional links with it outside the confines of the European Union.
By the time the 2015 general election came around, the UKIP, with several members in the European Parliament, was able to impose a disproportionately influential role in its campaign for Brexit. UKIP was a one-plank party and its audience included Eurosceptics across the British political spectrum.
Mixed up with the emotive issue of immigration, the UK’s membership of the European Union quickly became the issue of the day—every conceivable ill was placed conveniently on the doors of the EU. But there was one curious hero in this charter of ills—it was neither Farage, nor London’s colourful former mayor and Brexiter Boris Johnson. No, it was the Commonwealth, a group of nations united by history, tradition, language and a common vocabulary of politics.
Exiting from the EU, the argument goes, will leave the UK free to engage more robustly with its ex-colonies, the giant among whom of course is India. There are also the likes of Australia, Canada, New Zealand, Nigeria, Singapore and South Africa in the Commonwealth—all giants in the world of commerce and trade, engines of the global economy.
Britain, primarily a trading nation, would simply draw up a free trade pact with Europe (as Canada has done, though the deal is yet to be implemented, and India has been attempting to do) while boosting trade with the likes of India and Australia in the Commonwealth. According to this argument, which now looks set to be enshrined in the mainstream, the EU is in economic decline, while China’s economy grew 10% in 2002-12 and India’s by 7% in the same period.
The added advantage is lower levels of European immigration. That, however, is not the whole story. Over three-fifths of EU member-states’ trade in goods is conducted among themselves and intra-EU trade grew by a healthy 5.4% a year over the past decade. Besides, the EU accounts for 54% of the UK’s goods trade.
Its manufacturing prowess enfeebled and usurped now by China, the UK’s main comparative advantage in global trade lies in its services sector. And here, the UK’s trade in services with the EU has been tepid by comparison.
A long, tortuous path lies ahead of the UK as it negotiates the terms of its divorce with the EU. No one knows what the government has in mind, but remaining in the single market is a given. The terms of being allowed this may, however, be difficult to swallow—it may even include allowing Europeans freedom of movement to the UK.
With Brexit still a few years away, talk of a new relationship with the Commonwealth brings with it a whiff of the Commonwealth Free Trade Area, an idea that springs up in academic and policy circles every now and then.
It’s worth noting the challenges: trade in goods among Commonwealth nations is led by just six countries—Singapore, India, Malaysia, Australia, Britain and Canada—that together accounted for 84% of trade in 2011. Secondly, the smaller countries, many of whom are among the least developed in the Caribbean, have seen the preferential treatment once accorded by the UK eroded by the trade rules of the EU and the World Trade Organization. This means they are increasingly exporting their primary commodities to the US.
But the trade in services among Commonwealth countries is growing, according to a 2012 study by the Institute of Commonwealth Studies, a London-based think tank. And it is in the area of increased investment that there is an actual ‘Commonwealth advantage’ of common language, common laws and shared traditions, according to the report written by Ronald Sanders, who was a member of the Commonwealth Eminent Persons Group in 2010-11 from Antigua and Barbuda.
On 26 January 1950, the promulgation of the Indian Constitution changed the nature of the Commonwealth forever. For the first time, a Republic which does not owe its allegiance to the British crown was granted membership of the Commonwealth, thus modernizing the group.
The paths taken by the EU and the Commonwealth are a study in contrast. The EU began as an economic union and a political project was foisted on it later through the Brussels bureaucracy—one of the main reasons for Brexit. With the Commonwealth, the political spadework has already been done. Courtesy of Nehru, it’s a club of mostly friendly nations. It remains to be seen if post-Brexit UK, with its experience of the Europe Union, can now reinvigorate it with an economic purpose.
Dipankar’s Twitter handle is @Ddesarkar1