The Eu Or The Commonwealth: A Dilemma For The Uk – Or A Faux Choice?

Steve Peers

The United Kingdom of Great Britain as well as Northern Ireland of Britain as well as Northern Republic of Ireland has its finger inwards many pies: the EU, NATO, the UN Security Council as well as the Commonwealth, to lift but a few. Of these, the Commonwealth – which has but finished its latest summit coming together – evidently has the closest specific link to British civilization as well as history, since it’s mainly comprised of our onetime colonies. (A few Commonwealth members are non onetime colonies, as well as approximately obscure ex-colonies similar the USA chose non to join. For a total listing of members, reckon here).

   

Like many British citizens, I conduct maintain friends as well as relatives inwards many Commonwealth countries: Canada, India, New Zealand, Australia, Singapore as well as South Africa. But I also conduct maintain friends inwards the balance of the EU, equally good equally a professional person involvement inwards European Union law. There’s no incompatibility betwixt the ii at a personal level: nosotros tin all taste poutine equally good equally paella, or sentry Antonio Banderas 1 24-hour interval as well as Hugh Jackman the next. But is the same truthful of the UK's merchandise relationships?

When the UK joined the European Union over xl years ago, it sundered particular merchandise links which it had alongside most of the Commonwealth, as well as replaced them alongside merchandise links alongside the European Union (as it’s called now). One of the arguments sometimes invoked inwards favour of the UK leaving the European Union inwards the forthcoming plebiscite on membership is that the UK could opposite this process, reviving its Commonwealth trade.

But a lot has changed inwards xl years. In my view, what’s truthful for individuals is also truthful for the the world equally a whole: the UK does non conduct maintain to pick out betwixt merchandise alongside the Commonwealth as well as merchandise alongside the EU, but tin (and increasingly does) conduct maintain both. This spider web log post service explains why. (I’ll write approximately other post service on the upshot of the EU’s merchandise alongside non-Commonwealth countries inwards future).

Background

Back inwards 1973, the UK had to goal particular merchandise ties alongside the Commonwealth because the European Union is a customs union, which (according to the Definition laid out inwards international law) way that it has mutual merchandise rules alongside the balance of the world. The European Union has ability to sign sure enough types of merchandise deals, instead of its Member States (although inwards exercise those deals are commonly acre of written report to Member States' unanimous consent). But the EU’s powers don’t extend to all types of ‘trade deals’, equally that phrase is used past times non-specialists. Those powers apply to the imposition of taxes at the edge (known equally tariffs) or other economical regulation of merchandise betwixt countries, but not to commercial agreements alongside other countries to purchase British goods. So, for instance, the UK as well as Republic of Republic of India were gratis to conclude 84% of Commonwealth trade – as well as many to a greater extent than besides.

More precisely, at that spot are already FTAs inwards forcefulness betwixt the European Union as well as eighteen of those 50 Commonwealth states (36% of the remaining Commonwealth). The European Union has agreed FTAs alongside xiv of those countries (28%), acre of written report alone to completing the ratification process. It is negotiating or close to start negotiating FTAs alongside xiii states (26%). That leaves alone five Commonwealth states (10% of the non-EU total) that the European Union is non planning FTA talks with. (For total details of the condition of European Union merchandise relations alongside each of the countries concerned, alongside links to farther information, reckon the annex to this spider web log post).

Of course, the Commonwealth includes many different types of economy, but the European Union has agreed FTAs alongside ii of the wealthiest Commonwealth states (Canada as well as Singapore), as well as has lately committed to talks alongside ii to a greater extent than (Australia as well as New Zealand). It also has deals or is negotiating alongside most of the larger developing Commonwealth members (India, Nigeria, South Africa as well as Malaysia).

It’s sometimes suggested that the EU’s merchandise deals alongside other countries don’t produce goodness the UK. But the UK’s exports to Commonwealth countries conduct maintain been increasing at over 10% a yr – alongside increases (over ii years) of 33% to India, 31% to South Africa, 30% to Commonwealth of Australia as well as 18% to Canada. In fact, since 2004, British here).  

So the UK would conduct maintain to inquire maybe three-quarters of its Commonwealth partners for merchandise deals to supervene upon those already agreed alongside the EU. They mightiness concord apace to extend to the UK a parallel version of their existing organisation alongside the EU, since that would non actually alter the condition quo. But they mightiness non hold upwards interested inwards negotiating whatever further merchandise liberalisation. If they are interested, they volition inquire for concessions inwards return, as well as this volition conduct maintain fourth dimension to negotiate.

For the remaining one-quarter or thence of states, the UK volition conduct maintain to start negotiations from scratch, inwards approximately cases having to grab upwards alongside European Union negotiations that are already underway. And at that spot is no guarantee that these other states volition desire to hash out FTAs, or that negotiations would hold upwards successful.

Overall then, there’s no certainty that UK exports to the Commonwealth would gain from Brexit. They mightiness fifty-fifty drop, if approximately Commonwealth countries aren’t interested inwards replicating the EU’s merchandise agreements. Alternatively, they mightiness increment – but it’s difficult to reckon how whatever gain inwards British exports would hold upwards enormous, given the beingness of thence many FTAs betwixt the European Union as well as Commonwealth countries already, as well as the uncertainty of those states’ willingness to renegotiate those deals.

Could this really hypothetical increment inwards exports to the Commonwealth brand upwards for whatever loss inwards UK exports to the European Union next Brexit? Obviously, this assessment depends on how Brexit would impact UK/EU merchandise relations. That’s a hugely complex subject, which I volition furnish to approximately other day, but suffice it to say that spell I retrieve a UK/EU merchandise bargain later on Brexit is likely, it’s far from guaranteed. And it’s hugely unlikely that whatever such merchandise bargain would retain 100% of the UK’s access to the European Union market. There are many reasons to uncertainty this could happen, but get-go as well as foremost: why would the European Union shipping the signal that a Member State could leave of absence the European Union but retain all of its merchandise access? If it did that, the European Union would hold upwards signing its ain cash inwards one's chips warrant.

The key fact to operate along inwards heed hither is that the UK’s merchandise alongside the Commonwealth is less than one-quarter of its merchandise alongside the EU. So to brand upwards for fifty-fifty a 10% drib inwards exports to the EU, the UK would conduct maintain to increment exports to the Commonwealth past times to a greater extent than than 40%. How probable is that, if the vast bulk of merchandise betwixt the European Union as well as the Commonwealth would already hold upwards covered past times FTAs at that point?

Taken equally a whole then, it’s clear that the UK can stay a fellow member of the European Union and merchandise alongside the Commonwealth – as well as that this merchandise volition alone increment inwards futurity equally to a greater extent than European Union FTAs alongside Commonwealth states come upwards into forcefulness or are negotiated. Leaving the EU, on the other hand, is liable to Pb to reduction inwards merchandise alongside the remaining European Union without whatever plausible likelihood that merchandise alongside the Commonwealth would increment past times anything close the grade necessary to compensate.

Annex

Canada: FTA agreed. It must yet undergo the formal ratification process.

Australia: FTA negotiations start soon

New Zealand: FTA negotiations start soon

South Africa: FTA inwards force

India: FTA nether negotiation

Singapore: FTA agreed. It must yet undergo the formal ratification process.

Malaysia: FTA nether negotiation

Pakistan, Bangladesh, Sri Lanka, Maldives: No plans for FTA

12 Caribbean Commonwealth states: FTA inwards force betwixt European Union as well as xv countries including Antigua as well as Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Saint Vincent as well as the Grenadines, Saint Lucia, Saint Kitts as well as Nevis as well as Trinidad as well as Tobago

Brunei: No plans for FTA

2 Pacific Commonwealth states: FTA inwards force alongside Papua New Republic of Guinea as well as Republic of the Fiji Islands

7 to a greater extent than Pacific Commonwealth states: FTA nether negotiation between European Union as well as 12 to a greater extent than countries including Kiribati, Nauru, Samoa, the Solomon Islands, Tonga, Tuvalu as well as Vanuatu

3 West African Commonwealth states: FTA agreed alongside sixteen West African countries including Nigeria, Ghana as well as Sierra Leone. It must yet undergo the formal ratification process. (Note that Republic of The Gambia left the Commonwealth inwards 2013; but it is also utilisation of this agreement).

Cameroon: FTA inwards force

4 East African Commonwealth states: FTA agreed alongside five East African countries including Kenya, Tanzania, Republic of Uganda as well as Rwanda. It must yet undergo the formal ratification process. (Update: the Commission proposed the signature as well as provisional application of this bargain inwards Feb 2016)

2 Southern as well as Eastern African Commonwealth states: FTA inwards force alongside iv Southern as well as Eastern African countries including Republic of Mauritius as well as Republic of Seychelles (and also Zimbabwe, a onetime Commonwealth country).

2 other Southern as well as Eastern African Commonwealth states: FTA nether negotiation with vii to a greater extent than Southern as well as Eastern African countries including Republic of Malaŵi as well as Zambia.

5 Southern African Commonwealth states: FTA agreed alongside Botswana, Lesotho, Namibia, Swaziland as well as Mozambique. It must yet undergo the formal ratification process. (Update: the Council decided on the signature as well as provisional application of this bargain inwards June 2016; it volition hold upwards signed as well as operate inwards into forcefulness provisionally inwards mid-June).

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