In Focus: Could Brexit be a Boon for British trade with the Commonwealth?
| Date | 01 June 2018 |
| DOI | 10.1177/2041905818779330 |
| Published date | 01 June 2018 |
| Author | Benjamin D. Hennig |
24 POLITICAL INSIGHT • JUNE 2018
In Focus
Could Brexit be a Boon
for British trade with
the Commonwealth?
Commentators have suggested that the Commonwealth could become
more important for UK trade after Brexit. Benjamin D. Hennig maps the
current state of British-Commonwealth trade and finds a mixed picture.
The Commonwealth of Nations
has received increased levels
of interest in the United
Kingdom since the vote to
leaving the European Union in 2016. As
an intergovernmental organisation with a
consensus approach to decision making
and with very limited institutionalised
structures, the Commonwealth constitutes
a very loose and uncommitted association
of its 53 member states. In this regard, it is
an almost opposite model to the European
Union with its increasingly complex
intertwined structures that bind the
member states together.
The rekindled interest in the
Commonwealth was outlined by Theresa
May in her Lancaster House speech in early
2017, where she made direct links between
Brexit and the government’s plans for a
‘Global Britain’. The Commonwealth is ‘a
reminder of [Britain’s] unique and proud
global relationships’, the Prime Minister
said. While a 2009 survey across major
Commonwealth nations conducted by
the Royal Commonwealth Society showed
generally low levels of awareness about the
organisation and its future, it was mostly
the smaller and developing or emerging
economies that showed (relatively) higher
levels of support.
With its historic roots, the
Commonwealth provides the UK with a
platform where British identity is highly
present – arguably much more than it has
ever been in the EU – while also having
a certain established global relevance
through its geographical dispersion and
other key characteristics.
Economics appears to be the major
driver in this government rhetoric about
the relevance of the Commonwealth. The
Commonwealth accounts for 2.4 billion
people and its member states’ combined
economic size is, by some measures,
approximately 15 per cent of global GDP.
These overall statistics must be
relativised though, since they give a
distorted picture of the more disparate
realities. By population, India weighs
heavily, a large share of the countries
are small island nations, and the levels
of economic development range from
Malawi’s per capita GDP of £237 to Australia
with over £41,000 per capita. In terms of
economic power, India is set to surpass the
UK’s total GDP in 2020.
When looking more specifically at
the UK’s trade relationships with its
Commonwealth partners, an almost
constant rise in the overall trade of goods
and services was observed in the decade
from 2000 to 2010, after which both
exports and imports went down again
slightly. In 2011, the UK reached a small
positive trade balance in its trade with
the Commonwealth for the rst time in the
period since 2000. In relative terms, exports
accounted for 8.9 per cent and imports for
7.8 per cent of the total trade in goods and
services. Exports are therefore at a similar
share as they were at the start of the century,
while imports went down slightly resulting in
this recent positive trade balance.
As a recent House of Commons
Library Briefing noted, exports to the
Commonwealth are at similar levels as
exports to Germany, and imports are at
levels that compare to those from China.
Therefore, trade with the Commonwealth
can be regarded as relatively low compared
to that with the EU (43.1 per cent of exports
in 2016, 54.9 per cent of imports).
Understanding trade with the
Commonwealth also requires further
geographical differentiation. UK exports to
the Commonwealth are concentrated in a
few countries that are more heavily traded
with, as demonstrated in the cartogram
that shows the quantitative dimension and
the relative shares of UK exports and the
Commonwealth trading partners.
The trade picture becomes even more
disparate when looking at the trade
balances as illustrated by the pair of
cartograms on UK-Commonwealth trade,
that show the distribution of individual
surplus and deficit in trade relationships.
While there has been a modest overall
Commonwealth trade surplus in recent
years, this is largely dependent on trade
with a few countries, such as Australia,
Singapore and Canada, which account for
three-quarters of the overall trade surplus.
Political Insight June 2018 NEW.indd 24 02/05/2018 15:40
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