The rising tides of anti-globalization and the emergence of trade-war are changing the pattern of global trade, while promoting the evolution of trade mechanisms. Anbound has previously stated in its analysis that there is a global shift from being multi-polar to bi-polar. There are currently indicators of the collapse of the era of global multilateralism that have been represented by the WTO, giving way to creation of bilateral agreements and new multilateral mechanisms. Having been accustomed to living in a "big circle of friends", we are now pushed to disperse and establish our own "small circles of friends".
Upon the completion of Brexit, the Commonwealth Common Market could also be become among these "small circle of friends".
With a total of 53 nations and territories, the Commonwealth is the political legacy of the British Empire's colonialism and expansion. Up to the 1950s and 1960s, the Commonwealth was Britain's tool to manage the decolonized nations that it could no longer govern or protect. For many of these decolonized countries, there are significant benefits from the Commonwealth. Britain has special trade measures; for instance the banana imports of its former Caribbean territories are better compared to that of Central America. Commonwealth citizens also have the right to relocate to Britain and those residing within Britain have gained the voting rights that other nations' citizens do not enjoy, even the citizens of other EU countries.
However, for the past 30 years since Britain joined the EU, the above-mentioned privileges have been removed. The sole objective of the EU is to establish a regional free trade zone. Hence, Britain was barred from giving the citizens of its previous colonies the voting rights. The UK's immigration policy has also been tightened and now only the Commonwealth citizens that have family within the UK can enjoy special rights. However, this could possibly change in the post-Brexit era.
When Britain started its Brexit negotiations, Anbound's chief researcher, Chan Kung did an analysis that Britain is indeed considering the establishment of a "Commonwealth Common Market". However, during that point of time, even the British themselves thought it was unlikely. Nonetheless, Chan Kung was resolute on his analysis.
In the backdrop of Brexit, this possibility is gradually rising. Britain has been a part of EU for decades and thus not been able to negotiate its own trade agreements. However, once Brexit is materialized, it could once again negotiate its own trade agreements. Even though Britain has been a part of EU all along, it has pressured the EU, requesting for the execution of trade agreements with the other Commonwealth countries. Part of the reason was because EU has initiated negotiations on free trade agreements with several Commonwealth nations. Currently, Canada and India are negotiating free trade agreements with the EU. In addition, North Africa, Cameroon, Zambia and several of the 12 Commonwealth nations' Caribbean Community members have established free trade agreements with the EU. Moreover, through the Lomé and Cotonou Agreements, the EU provided preferential trade access to developing Commonwealth nations.
Since the Commonwealth nations could establish free trade agreements with the EU, why not establish a free trade agreement within the Commonwealth? This thought has ignited the interests of British political circles and parties, who have advocated using the EU and Commonwealth free trade policies as a key step to reshape Britain's trade policies. During the 2010 UK's General Election, Britain's Independence party, in its manifesto, proposed the establishment of the Commonwealth free trade agreement. Additionally, some of the members of the British Conservative Party have also publicized the benefits of expanding the trade between the Commonwealth and the extensive British continent. During October 8, 2012, at the British Conservative Party's meeting in Birmingham, Tim Hewish and James Style presented their paper titled "Common Trade, Common Wealth, Common Growth". Former Britain's Foreign Minister, William Hague also commented on how the Commonwealth countries, which have been overlooked by the British government, could bring "tremendous opportunities" for Britain.
In 1997, the Commonwealth Heads of Government Meeting (CHOGM) received a Commonwealth secretariat endorsed research paper by Sarianna Lundan and Geoffrey Jones. The paper, titled "The 'Commonwealth Effect' and the Process of Internationalization", measured the advantages that Commonwealth nations have in mutual trade relative to non-Commonwealth nations. The research found that even in the absence of a trade treaty, there is significant cost advantage in trade between Commonwealth nations as the indirect cost of doing business is reduced by 15% compared to trade outside of the Commonwealth. The Commonwealth Chamber of Commerce's research also revealed that the Commonwealth has significant trade and investment benefits due to the sharing of common language (English is the first or second language of the Commonwealth), unwritten traditions and accounting norms. Therefore, cooperation between Commonwealth countries could increase efficiency by 10-15%.
Historically, it can be observed that Commonwealth not only has a strong institutional tradition, identity and historical memories brought upon by the "state sovereignty", it also has material economic and trade benefits. In this Post-Brexit, global trade war era, Britain is in dire need of the establishment of a Commonwealth Common Market multilateral trade association. If this platform is fully utilized, it would raise the bleak prospects of the post-Brexit British economy.
It should be emphasized that the main challenge to the establishment of the Commonwealth Common Market would be imbalanced development and the huge disparity between the poor and wealthy nations. In the past, Britain was part of the EU. Now, as the US gradually abandons multilateral trade pattern, there is a huge possibility that soft-Brexit will succeed. This will spring up the conditions for the emergence of the Britain and Commonwealth Common Market mechanism. At this point of time, it is too early to ascertain whether this could be materialized. However, it is certain that the conditions for the establishment of the Commonwealth Common Market are ripening.
Final analysis conclusion:
Soft-Brexit and the U.S.'s abandonment of the multilateral trading system are creating the conditions for the establishment of the Commonwealth Common Market. The latest global trade environment is also paving the way for Britain to promote the establishment of the Commonwealth Common Market. In summary, the conditions to promote the establishment of the Commonwealth Common Market are gradually ripening.
