FT: The fantasy of Commonwealth bonds hinders trade progress




March 9 | By: Geoff Raby. 

The bonds of history, language and political institutions shared by Commonwealth members offer an opportunity for a post-Brexit UK trade policy. However, in the week that trade ministers from the bloc meet in London, Britain should be wary of putting all its eggs in that basket.

The last time the Commonwealth had a common trade policy was before the establishment of the Bretton Woods institutions, especially the General Agreement on Tariffs and Trade (GATT), which came into effect in 1948. At Bretton Woods the US set about destroying Britain’s system of “imperial preference”, which GATT successfully unwound. Imperial preferences were structured to benefit the UK at the expense of both its colonies and non-members. The collapse of the system fuelled the era of open multilateral trade.

In the 44 years since the UK joined the EU, the world and indeed the Commonwealth have changed markedly. Finding areas of common interest in free-trade agreements between highly developed large economies such as the UK, Canada and Australia, densely populated big countries such as India, chronic underperforming economies such as South Africa and Pakistan, and micro states in the Pacific, is an almost insuperable challenge.

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