With the UK now free to strike ambitious and far-reaching free trade agreements and as the advent of ‘Global Britain’ begins, the Conservative Party finds itself at a unique juncture in our history at which a third pillar of economic influence could be forged. Starting with a truly ambitious trade agenda.
The UK’s Conservative Government has already demonstrated their commitment to global trade through the setting of the UK Global Tariff, which will streamline and simplify tariff lines, reduce or remove red tape and make it cheaper and easier to import goods from overseas. The UKGT creates a tariff regime at well below the equivalent European Union Common External Tariff rate.
The Department for International Trade under Liz Truss aims to negotiate FTAs with Canada, New Zealand and Australia in rapid time. Indeed, the process of ‘scoping-out’ talks began with each nation before the UK had officially left the European Union in January 2020, but formal negotiations have now begun in earnest.
The appetite from across the 4 CANZUK nations for extensive FTAs is high; Australia’s PM Scott Morrison has spoken of a desire to close a bilateral deal within 12 months. UK-Canada trade shot-up 14% in the year following CETA, clearly demonstrating the benefit to both countries from the removal of barriers and tariffs. New Zealand’s Minister for Trade, David Parker, has spoken of the potential to reach a deal with the UK faster than any other country.
Rather than work simultaneously on 3 separate bilateral FTAs, CANZUK nations should instead focus their efforts on negotiating a CANZUK Single Market that would expediate trade across all 4 nations. Collectively, the economies of Canada, Australia, New Zealand and the United Kingdom would account for over 10% of global GDP. A market of that size would attract interest from third-countries and give each of the 4 nations better economic clout to defend against the efforts of trade wars, such as China’s recent imposition of tariffs on Australian Beef.
The Australia-New Zealand Closer Economic Relations Trade Agreement (CER) signed in 1982 provides an excellent framework that could be the basis of a multi-lateral CANZUK agreement. CER saw the total elimination of tariffs and quantitative restrictions between the two countries by 1990, but also crucially affirmed that anyone recognised to practice an occupation in one country could do so in the other (with a few exceptions such as medical practitioners).
The UK has also agreed Mutual Recognition Agreements with both Australia and New Zealand meaning that conformity assessments ensuring that products meet specified legal standards are already in place once the UK leaves the Brexit Transition Period.
The geographical situation of each country would give a CANZUK Single Market a truly unique presence in Europe, North America and Australasia, with easy reach to the emerging markets of South America and Asia. This potential would be strengthened by each country’s membership in existing bilateral and multilateral trade agreements, such as Canada’s membership of NAFTA (North American Free Trade Agreement) and Australia’s membership of the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership).
The time has come for the UK’s Conservative Government to take a firm lead in developing plans for a multilateral trade agreement which will unite the markets of CANZUK. Tories4CANZUK believe that forging a new Single Market is the best way forward.