Commonwealth: Trade

Lord Spellar Excerpts

Wednesday 22nd February 2017 Westminster Hall

[Jake Berry]

I agree absolutely. I was in touch only this week with the Falkland Islands Government, who are watching this debate to see what is said about the Crown dependencies and overseas territories. I will come to how we must absolutely ensure that they are not left behind in any new Commonwealth trade deals.

Doing business in the Commonwealth makes sound economic sense for Britain. This is not a throwback to a sepia-tinted view of the Commonwealth; it is about ensuring that Britain’s economy grows. The facts speak for themselves. The Commonwealth is a market that comprises 52 largely English-speaking countries with a combined population of 2.6 billion, covering a third of the globe. Some 60% of its citizens are under 30, and half of the top 20 global emerging cities are in it. It should be noted that, although the UK has a trade deficit with the EU, it has a trade surplus with the Commonwealth that stood at £1.9 billion in 2015. The Commonwealth contains mature and open economies such as Canada, Singapore, Malaysia, New Zealand and Australia, exciting new emerging markets such as India, and developing economies in Africa, the Caribbean and the Pacific. It has a combined GDP of more than $10 trillion. It includes five G20 countries, with trade projected to surpass $1 trillion by 2020.

[Mr John Spellar (Warley) (Lab)]

Among the mature economies and G20 countries that the hon. Gentleman mentions is Canada, and I hope he joins me in welcoming the House’s decision on 8 February to endorse the EU-Canada trade deal. In parallel with that deal, should not we look into a trade deal with Canada to take place shortly after we have left the EU? After all, if we cannot do a deal with Canada, where many of us have relations and with which we have strong links and a strong strategic and security alliance, who the hell can we do a deal with?

[Jake Berry]

I believe we can do a trade deal with Canada. The whole country was recently united in shouting “Where on earth is Wallonia?” That shows that the European approach to negotiating trade deals is wrong—I will come on to how the Government can set out a better approach than the EU-Canada trade deal. Canada has indicated that it wants a trade deal with Britain.

The Commonwealth’s GDP does not match the EU’s, which is some $16 trillion. However, the EU’s growth rate has averaged only 1.7%, while the Commonwealth’s is currently more than 4%. As Britain prepares to leave the European Union, it is with the Commonwealth—our extraordinary family of nations—that we should seek to strike trade deals. A recent report on the Commonwealth states that on average it is 19% cheaper for businesses in the Commonwealth to do trade, because of our common legal systems, language and culture. The Commonwealth and its nations represent a growing and increasingly important market for Britain; Britain, in turn, represents the fifth largest economy in the world and a gateway into Europe for Commonwealth nations.

When it comes to trade deals, we in this country have a lot to learn from our Commonwealth partners, which are blazing a trail for free trade among themselves. Australia already has a free trade agreement with New Zealand and is negotiating a free trade deal with India, and both Australia and New Zealand are parties to the Association of Southeast Asian Nations deal. Britain should seek to emulate such trade deals. Unlike the EU, Australia and other Commonwealth partners have not made the perfect the enemy of the good. In many cases, they have opted for a sectoral approach. They are prepared to sign multiple trade deals—the one between Australia and Singapore is an example—and when areas of co-operation are agreed, they sign a trade deal about those areas and put the more divisive areas to one side. We should compare that with the eight years that it has taken the EU to negotiate with Canada.

I hope that at the Commonwealth Trade Ministers meeting next month the Minister and his Department will seek to start negotiations with Canada, Singapore, Australia, Malaysia and New Zealand, which are large, open economies.