Time to embrace our Commonwealth future

Brexit and the pandemic give the UK a unique opportunity to deepen ties with these growth markets

This country stands at an extraordinary juncture in history. A confluence of major geopolitical events – the United States electing a new president unaligned politically with the UK administration, a global pandemic that has caused catastrophic economic devastation, and the UK’S departure from the EU – will potentially transform Britain’s place in the world, where it currently sits as the fifth largest economy. The steps the UK takes now as it prepares to “fly solo” will determine its future economic prosperity.

Former Prime Minister Sir John Major recently warned that the UK risked isolation post-brexit. However, if the Government moves now to consolidate its relationship with the Commonwealth, an association of 54 countries with well-established trading relationships, and with a shared language, legal frameworks and principles of democracy, it will anchor itself in a formidable economic platform with India at its heart.

Since its foundation in 1949, the modern Commonwealth has never been more relevant. Yet the Commonwealth has always been more important to citizens outside of the UK than to those who live here. Many British people are not even aware that the United Kingdom is a Commonwealth country and that Her Majesty The Queen has proudly led the Commonwealth of Nations for six decades, visiting almost all of them.

Many Britons will also not know, therefore, that the UK is currently the Chair-in-office of the Commonwealth and will hold that position until June next year. Yet this creates a unique opportunity for the country as it embarks on the path to economic recovery and establishes itself in the open global market.

While the UK rapidly negotiates separate free trade deals with Commonwealth countries – Canada, Australia, New Zealand, India and Kenya, among them – there is a chance to consolidate all of the economic benefits together known as the “Commonwealth advantage”. Indeed, Commonwealth countries already trade more and generate 10 per cent more investment with each other than with countries that are not members. Last year, British exports to the Commonwealth were worth £65.2 billion; British imports from the Commonwealth were worth £64.5 billion.

The case is made more pressing by the fact that Covid has substantially altered the global economic landscape. The big sectoral losers from the pandemic are tourism, retail, aviation and hospitality; while fintech, online retail and education, healthcare and tech companies are booming. And as countries emerge from the darkness of Covid, they are seeking new opportunities in growing markets, most of which are Commonwealth members.

The African Continental Free Trade Area, for example, will be ratified in January 2021, forming one of the world’s largest trading blocs. The agreement will create a continental market for goods and services with free movement for business-people and capital, and pave the way for a customs union. Nineteen of the signatories are Commonwealth countries.

India, as one of the world’s largest economies and democracies, is also the largest Commonwealth country and a global economic powerhouse that will continue to play a dominant role. Trade between the United Kingdom and India was worth £24 billion in 2019 alone and India is now the second largest investor in the UK economy.

With the exit of Donald Trump, meanwhile, the Chinese juggernaut, temporarily weakened by Covid, has bounced back with even greater force. With the might of Chinese dominance potentially now unchallenged, there is safety in numbers. The Commonwealth offers a strong coalition of nations ready to join forces based on a set of clearly defined principles of operation.

The benefits are clear. As the UK sets out its new agenda for “Global Britain”, the Commonwealth advantage must be leveraged, promoted and embraced to assure our success in this brave new world.