Commonwealth Leaders Look to Deeper Economic, Trade Ties
Leaders at the biennial Commonwealth Heads of Government Meeting (CHOGM) last week examined a series of areas for deeper cooperation, including trade and investment, sustainable and inclusive economic growth, climate action, and ocean preservation and conservation.
The Commonwealth meetings took place from 16-20 April in London, UK, with this year’s event focusing especially on building a better future for young people, who make up 60 percent of the Commonwealth’s population, as well as women.
The Commonwealth is composed of 53 countries of varying economic weight, development levels, and population sizes, from across different world regions, which have historical ties to the United Kingdom. Together, Commonwealth countries account for approximately a third of the world’s population and have a combined gross domestic product (GDP) of US$10.4 trillion according to the Commonwealth’s factsheet.
Reviewing trade policy approaches
In the group’s communiqué released after the meeting, leaders devoted a section to the multilateral trading system, where they voiced concerns over “the risks of protectionism to the global economy” and reiterated past support of “free trade in a transparent, fair, and open rules-based multilateral trading system, which takes into account the special requirements of least developed countries and small and vulnerable economies.”
Other pledges included lending their support to advancing WTO negotiations, particularly in outstanding areas of the Doha Round agenda, as well as in implementing the global trade club’s Trade Facilitation Agreement (TFA), which aims to streamline customs procedures, cut red tape at the border, and lower trade costs.
A later section on inclusive trade referred to the value of “taking a gender-responsive approach to the development of trade policy” and calling for steps to be taken that would help support companies run by women and facilitate cross-border trade.
“The diversity of our different countries, our geography and stages of development gives us a shared resilience and the opportunity for trade between very different economies,” Catherine McGuiness of the City of London Corporation said to the Business Forum. “We in the Commonwealth need to share with each other best practice in delivering [the Sustainable Development Goals] and on other issues, understanding what works and what doesn’t.”
Before the meeting, some officials called publicly for using the Commonwealth framework to shore up trade ties further. Intra-Commonwealth trade is currently estimated at US$687 billion, with trading costs between Commonwealth partners on average 19 percent lower compared with other country pairings according to their factsheet.
In a speech to the Commonwealth Business Forum, the UK Secretary of State for International Trade Liam Fox suggested that the UK’s impending exit from the EU could be a valuable moment for considering new approaches and partnerships.
“As the United Kingdom leaves the European Union, we have the opportunity to re-invigorate our Commonwealth partnerships and usher in a new era, harnessing the movement of expertise, talent, goods, and capital between our nations in a way that we have not for a generation or more,” Fox said.
“In an era when free trade is increasingly threatened by the siren call of protectionism, we have the opportunity to reject insularity in favour of economic openness and co-operation. … This will mean leading by example, and where better to begin than with our friends and partners in the Commonwealth?” he added.
Meanwhile, New Zealand Minister of Foreign Affairs Winston Peters went further, suggesting that leaders could consider a Commonwealth trade pact in the future.
"There's a whole lot of excitement about that and how we might begin to put some flesh to an idea, which was levelled two years ago, but since 23 June 2016 it's become real and so that was very exciting,” he told Radio New Zealand. That date refers to the Brexit referendum where UK citizens voted to leave the European Union.
Leaders did not officially endorse any such plans for a formal Commonwealth trade agreement in their final communiqué. They did, however, refer to the “importance of a long-term vision on trade and investment” and noted their plans to develop an “appropriate framework” in this respect.
Meanwhile, the Commonwealth meeting also gave leaders the chance to meet bilaterally, including on trade, with high-profile meetings including that of the prime ministers of the UK and India. A joint statement released afterward referring to plans for developing “new trading arrangements as the UK assumes responsibility for its independent trade policy,” without specifying what that might look like.
Connectivity, trade finance and facilitation
During the event, leaders launched the Declaration on the Commonwealth Connectivity Agenda for Trade and Investment. Within the document, leaders commit to dialogue around physical, digital, regulatory, business-to-business, supply side, and sustainable trade connectivity.
“With members drawn from every geographic region and every level of development, we affirm the role the Commonwealth can play in supporting global growth, creating employment, the sharing of best practices and learning, and promoting development among its members,” the leaders said.
To support developing countries in the group participate in international trade, UK Prime Minister Theresa May declared that the UK would begin funding the Commonwealth Standards Network. She also announced the funding of a Trade Facilitation Programme to provide technical assistance to specific Commonwealth countries in implementing the WTO’s Trade Facilitation Agreement.
Climate action, oceans
As some of the Commonwealth’s members are small developing island nations, climate change was an important aspect of the discussions. Leaders in their communiqué called upon countries to fulfil their requirements under the UN’s Paris Agreement on climate change, including transitioning to greater use of renewable energy sources.
“Heads expressed grave concern that without urgent action to mitigate climate change, reduce vulnerability, and increase resilience, the impacts of climate change could push an additional 100 million people into poverty by 2030,” leaders said, noting that some Commonwealth members are particularly at risk from the effects of a warming planet.
Along with flagging the importance of implementing international climate commitments, including in the sectors of aviation and shipping, the group also highlighted the value of climate finance, particularly in terms of preparing for disaster risks.
The group also endorsed a Commonwealth Blue Charter calling for a plan of action to address ocean-related concerns, noting that the “deteriorating health of the world’s ocean… poses an existential threat to many Commonwealth countries.”
“Our activities are increasingly putting the health of the planet’s valuable ocean ecosystems in peril. This is not an issue that any single country can solve. That is why we, the Leaders of the Commonwealth, are calling for ambitious, coordinated action, while recognising our different abilities, to sustainably manage, protect, and preserve our ocean now, for the sake of present and future generations,” the charter says.
ICTSD reporting; “May woos Modi as UK pursues free-trade deal with India,” 18 April 2018, THE GUARDIAN; “EU hopes Brexit will help deliver an India trade deal,” 12 April 2018, POLITICO; “A British illusion of Commonwealth trade after Brexit,” 18 April 2018, FINANCIAL TIMES.