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What's the value of the Commonwealth? Nearly $4 trillion in untapped trade
00:04 am GMT+12, 11/04/2018, United Kingdom

By Latika Bourke
 
Trade between the Commonwealth nations could explode to $3.86 trillion in value by the end of next decade a British inquiry committee has said.
 
The predicted boost in the value of trade depended on the 53-member countries of the Commonwealth signing up to a series of proposals to lower the cost of trading goods, particularly in African nations.
 
The committee said they would also need to harmonise regulations to facilitate the booming services sectors seen in countries such as Australia and Singapore.
 
Next week's Commonwealth Heads of Government meeting (CHOGM) should “tackle head on” rising protectionism around the world, a veiled reference to US President Donald Trump's “America First” pledge, which has sparked a potential trade war with China.
 
The report acknowledged the belief that globalisation and trade are a “tool for development” had “suffered damage recently.”
 
"There are now genuine fears that other countries may continue to slide into a protectionist stance, which would harm the prospects for prosperity and economic development in the many small states and emerging markets of the Commonwealth in particular,” the report said.
 
The report found that extreme poverty rates remained persistently high in the Commonwealth and were more than double the UN global average.
 
The report identified "under-trading" between Asian and African members, as well "considerable untapped potential for trade expansion" between developed countries including Australia, the United Kingdom and Canada with developing Caribbean, Pacific, African and Asian nations.
 
Under a “business as usual” scenario, trade in goods between the Commonwealth is forecast to rise from US$525 billion in 2015 to US$2.75 trillion in 2030 and potentially to US$3.86 trillion "in a more optimistic scenario" which involves member nations lowering their trade barriers.
 
The report's key recommendations include:
 
*a commitment to reduce costs of trade by 15 per cent by 2030
*harmonise and slash regulation to boost services
*consider developing a fair and sustainable trade initiative to improve conditions for domestic producers and workers
*increase aid-for-trade programs for developing countries
*expand funding for digitised custom clearance processes, investment permits, business registration and tax assessment as well as allocating more money to strengthen border force agencies and ensure importers have access to a fair and transparent appeals process.
*8 establish a sub-committee under the finance ministers to increase collaboration with international concessional lenders, including the Asian development bank, European investment bank and the Caribbean Development Bank.
*establish twice-yearly meetings of the Commonwealth Trade ministers.
 
Countries such as Nigeria and Bangladesh could learn from Singapore and New Zealand how to reduce the costs and processing times for imports. Nigeria for instance, takes 450 hours to clear a standard shipping container, while Singapore takes just 36 hours.
 
The British Parliament's 'Trade out of Poverty' all-party parliamentary group established the inquiry.
 
Committee co-chair, Tory MP James Cleverly, told Fairfax Media that Australia was well placed to back the report’s findings and play a key role in harnessing the Commonwealth’s untapped potential.
 
“The findings of this report, that unlocking the Commonwealth’s full trade potential could lift millions out of poverty, won’t come as a surprise to Australia – one of the world’s strongest advocates of free trade.”
 
“Australia has a key role to play in helping harness the Commonwealth’s full potential which if realised could help tackle poverty on Australia’s doorstep in the Pacific Islands as well contribute to improving living standards for Australians.
 
“Poverty in the developing world is not inevitable or unbeatable,” he said.
 
Australian Lisa McAuley, CEO of the Global Trade Professionals Alliance and formerly head of Australia's Export Council, was a member of the committee.
 
McAuley said the Commonwealth countries started from a position of strength given their shared common language and common law legal systems but needed to take the next steps to change the face of trade and make it work in a fairer and more inclusive way, especially for women and smaller developing countries.
 
“The interests of Commonwealth members are not entirely homogenous,” she said.
 
“The Commonwealth can take a leadership role in shifting the nature and tone of the aid-for-trade and trading-out-of-poverty discourse, from its historically paternalistic nature, to one based truly on collaboration, mutual benefit, and genuine exchange of perspectives on key issues.”
 
McAuley cited two projects already being funded by the Department of Foreign Affairs as examples of programs that could be established between member countries and across the commonwealth.
 
One includes a business-training course offered to women small business owners from Pacific countries. A two-week Australia Awards short course conducted intensive tailored training for the women to help them develop export business and strategy plans.
 
That programme is now extended for three years and will eventually invite women from Commonwealth countries further afield, including: Bangladesh, India, Pakistan, Sri Lanka, Fiji, Vanuatu, Solomon Islands, Samoa, Tonga, Papua New Guinea, Kiribati, Nauru, Tuvalu.
 
McAuley said her organisation was also developing export associations and chambers of commerce across Asia and the Pacific to help them build business, networking and export networks.
 
“This initiative is very unique and I believe this is a programme that could be replicated and supported by other developed countries for other developing Commonwealth countries,” she said.


SOURCE: SMH/PACNEWS
 


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