Future of the Commonwealth

Debate between Julia Lopez and Gillian Keegan

Wednesday 21st March 2018 Westminster Hall

[Gillian Keegan (Chichester) (Con)]

I congratulate my hon. Friend the Member for Gloucester (Richard Graham) on securing this debate and on his excellent speech, particularly his focus on the United Nations sustainable development goals.

The UK’s trading future on the international stage is promising, and nowhere more so than within the Commonwealth. As a group of 54 nations, we are part of a collective comprised of 2.4 billion people—a third of the global population—and occupying about a quarter of the world’s land mass. By building on our relationships within the Commonwealth, we will further the goal, set out by my right hon. Friend the Prime Minister, of becoming a truly global Britain.

The Commonwealth has strong foundations rooted in seven decades of collaboration. It has helped support smaller nations develop, strengthening economies and democratic institutions. Our collective economic strength is significant: a shared gross national income of more than $10 trillion, and internal Commonwealth trade is expected to grow to $1 trillion by 2020. As we seek to develop new opportunities further, we do so from a platform of shared histories. In many cases we have a common language and a common legal structure. We should therefore in theory have fewer barriers to overcome in reaching agreements. Already, 80% of Commonwealth countries benefit from preferential access to the UK’s market. Furthermore, the Royal Commonwealth Society has highlighted the fact that there are already significant trade advantages within the bloc. In a recent study it found that transaction costs between two Commonwealth partners are 19% less than they are between non-Commonwealth nations: that is driven largely by language and legal systems.

When we consider bolstering our trading relations internationally, we need to do it strategically. I am pleased that the Department for International Trade is working with many of our partners to lay down the basis for future trade agreements. However, we are limited by our capacity to broker deals. Free trade agreements are clearly an ambition, and rightly. However, they do not always meet expectations. In most cases deals are designed around goods, but if we are to capitalise on our competitive advantages they will need to include service markets. The reality is that for businesses that trade internationally there are several non-tariff barriers that free trade agreements often do not address, such as licensing agreements, capital controls and ownership rules. The British Chambers of Commerce identified non-tariff barriers as the most important area of concern for business in non-EU third-party agreements.

[Julia Lopez]

One of the difficulties that businesses have faced in recent years, particularly in trading with such places as Australia and New Zealand, is the movement of personnel. Because we have had such free and easy migration arrangements with Europe, it has been a problem to try to get movement from those other countries. Does my hon. Friend agree that an interesting idea to consider is something like a realm visa, which would give easy access to people from countries where the Queen is the Head of State, such as Australia, New Zealand and Canada?

[Gillian Keegan]

Yes, I do agree. As we design an immigration system to meet the needs of the country, we will not have either artificial numbers or systems that do not meet the needs of businesses or our skills agenda.

Today the EU has, or is negotiating, trade deals with more than 80% of Commonwealth countries, in part thanks to the efforts of UK Governments, so we must ensure that we develop bilateral agreements to replace them. Bespoke deals could do just that. Singapore, for example, is a tech business hub for its region and could be a potential gateway to other Asian countries for British businesses. Like finance, technology consolidates in hubs, around talent and investment. We already enjoy a prominent position in the sector, with 18% of global data flows passing through the UK, so there is opportunity to grow. Singapore is currently finalising a deal with the EU.

We therefore hopefully have a foundation from which to work, with the potential for it to be more tailored to our national interests. Canada, too, has a basis from which to work, with the EU-Canada comprehensive economic and trade agreement. Furthermore, we are Canada’s largest export market within the EU, and therefore there is a great mutual benefit to striking a deal.

In 2015 UK Commonwealth exports were £47.4 billion, with five larger economies—Australia, Canada, India, Singapore and South Africa—accounting for 70% of our Commonwealth exports and 65% of imports. There is therefore scope to expand our working relationships with the smaller developing Commonwealth nations. Technology, regulation, standards and skills training can act as a gateway to greater investment and openness in developing economies and provide career opportunities for large numbers of young people.

The Commonwealth provides the UK with a great opportunity for the further development of economic, diplomatic and cultural ties with nations that already have much in common with us. As the Prime Minister said last year, we face new and unprecedented joint challenges, and we all have a responsibility to work together as partners to ensure that the Commonwealth has the institutional strength to face them. Our trading relationships, if executed strategically, will drive prosperity both here and throughout the Commonwealth.