I’m not sure it ever made sense to abandon a global trading system..
The Commonwealth is booming – it's time to embrace free trade with the Anglosphere
Daniel Hannan, Conservative MEP for South East England
4th November 2018
Australia may be on the other side of the world, but it is hard to think of a country closer to Britain in every other sense. CREDIT: RUDI VAN STARREX/GETTY IMAGES
Flights to Australia have been around for almost as long as commercial air travel itself. But they used to be unbelievably tedious and expensive affairs. A trip from London to Brisbane in the 1930s involved 24 fuel stops and took 11 days. A return ticket cost the then-astronomical sum of £13,000.
On Monday, I made the journey to Australia in a single leg, flying directly from London to Perth on Qantas’s new route. That shrinkage of time - 11 days to 17 hours - is one answer to those who, even now, insist that Britain’s commercial and diplomatic energies should be focused on Europe.
Europhiles tend to belittle trade with distant lands. Australia, they scoff, is our 16th export destination, behind Germany, France, Italy and Spain. But they are begging the question. Of course EU countries are our major trading partners: since 1973, we have been in a customs union with them, specifically designed to redirect our trade toward the Continent. That reorientation, as an LSE study showed, had an impact on our internal economic geography. Glasgow, Liverpool and Bristol found themselves, as it were, on the wrong side of the country; wealth and population shifted to the South East.
I’m not sure it ever made sense to abandon a global trading system – a diverse grouping of agrarian, commodity, manufacturing and service-based economies linked by the common law and the English language – for a bloc of homogenous European economies. The purpose of trade, after all, is to swap on the back of differences.
But whether or not it made sense in 1973, it plainly makes little sense today. Over the past half century, freight and refrigeration costs have tumbled, flights have become cheaper and more comfortable and the internet has revolutionised communications. At the same time, the Commonwealth has surged economically: its combined economy surpassed that of the eurozone in 2012 and will overtake the EU as a whole next year.
These days, cultural proximity trumps geography. Australia may be on the other side of the world, but it is hard to think of a country closer to Britain in every other sense. A million Australians visit Britain every year, spending nearly a billion pounds here. Australia, for its part, is home to 1.2 million Poms – more than the other 27 EU states combined.
Unsurprisingly, there is overwhelming support for an Australia-UK free trade agreement. The only opponents, other than those fringe Leftists who hate commerce on principle, are a handful of irreconcilable Remainers who can’t bear the thought of Brexit succeeding. In both countries, there is keen interest in making such a deal part of a wider trade consortium that would bring together the chief English-speaking democracies.
I have spent much of the past year working with politicians and think-tankers from across the Anglosphere on what such a trade agreement should look like. In September, at simultaneous events in London and Washington, 11 British and American institutes published a draft treaty that would provide for the mutual recognition of goods, services and professional qualifications, as well as free movement of labour.
Mutual recognition is far preferable to the common regulation that underpins most existing trade deals. Instead of imposing standards on the participating countries, mutual recognition is, in effect, an agreement to trust one another. Mega-businesses loathe it, much preferring uniform international regulations, which they see as a way to raise barriers to entry and disadvantage smaller rivals. That’s one of the reasons that corporate giants tend to be pro-Brussels. Mutual recognition works for the consumer rather than the producer, for the entrepreneur rather than the bureaucrat, for the start-up rather than the multinational. It increases competition, cuts prices and widens choice.
The treaty that the British and American think tanks drew up – and it’s a full treaty, not just a sketch of what a treaty might contain – was drafted to be multilateral, open to other countries from the start.
Which other countries? Initially those that share a language and legal system and have compatible levels of income. I’d begin with Australia, Canada, New Zealand, Singapore and the United States. I would also include Hong Kong, where I’m typing these words after a week of discussing the idea in Perth, Melbourne and Sydney with enthusiastic businessmen and politicians – including two former prime ministers. Despite its problems with its neighbour, Hong Kong is the most dependable free trader in the world.
A case could also be made for Israel, which we tend not to think of as a former British territory, but which shares the others’ legal, commercial and regulatory approaches. Those eight countries would, together, constitute a third of the world’s GDP.
Could we form an Anglosphere trade nexus and still enjoy unhindered commerce with our European allies? Yes, in every circumstance except one. We could do it if we had a Canada-style trade accord; we could do it as members of the European Free Trade Association; we could do it, with some restrictions, under the Chequers proposal. But we couldn’t do it if we stayed in the customs union – something that, from sheer mischief, Labour now plans to vote for.
For two years, while we have been hectored and insulted by Eurocrats, our old friends in the Anglosphere have been waiting with touching patience. We let them down in 1973. Let’s not let them down again.