3 minute read
President’s Focus
Steve Allen, president of Greater Birmingham Chambers of Commerce, examines the importance the Commonwealth will play in the growth of UK exports and looks ahead to how the Birmingham 2022 Games can play a vital role
In June, the UK hosted the G7 leaders’ meeting in Cornwall. In addition to the world’s seven largest advanced economies, which includes Canada, this year Scott Morrison, the Prime Minister of Australia and Cyril Ramaphosa, the President of South Africa, attended as guests. Indian Prime Minister Nahendra Modi also attended virtually because of the ongoing Covid-19 crisis in his country.
It can be argued that with China and Russia absent, the G7 is an outdated institution and this year fell short of what was required on climate, aid and vaccines. However, the fact that five leaders of Commonwealth countries were involved is testament to their strategic importance and a recognition of their growing importance as economic powerhouses.
These nations, part of the 54 nations that make up the Commonwealth, provide an opportunity for a UK looking for a new post-Brexit role in world affairs and, of course, the all-important need to increase international trade. The Commonwealth’s combined gross domestic product tops $10tn or about 14 per cent of global GDP.
Currently, it can be argued that the UK is not doing enough to harness its longstanding and unique relationship with the Commonwealth to forge new trading opportunities.
The UK’s exports to the Commonwealth are worth approximately £64.4bn annually. However, this accounts for only 9.1 per cent of the UK’s total trade which is comparable with the UK’s trade with Germany alone.
It is of no surprise that Australia, Canada, India, Singapore and South Africa accounted for 72 per cent of UK exports to the Commonwealth. This may also provide a clue as to why the UK, who chaired the G7 summit this year, invited many of the leaders of these countries as guests.
More has to be done therefore to unlock the potential of global Commonwealth trade. One of the earliest post Brexit deals was with SACUM, the South African Customs Union which consists of South Africa, Botswana, Namibia, Eswatini, Lesotho and Mozambique. However, the Covid-19 crisis in the UK and in Africa has meant that little has come of this relationship to date.
Bilateral deals with the Commonwealth’s big players appear to be the focus for now with the Canada-UK Trade Continuity Agreement signed earlier this year and a new Australia-UK trade deal in the offing later this year.
It is to be hoped that these deals unlock more of an opportunity for the UK to export to these countries. Currently, an Australian trade deal would add only 0.01 to 0.02 per cent to our GDP over 15 years. There is clearly, therefore, more to be done and more opportunities to trade with the Commonwealth’s big players.
The Greater Birmingham Commonwealth Chamber was established to help our members develop trade links with Commonwealth countries. The Commonwealth Games next year will provide an important platform for our city region to promote our key sectors to Commonwealth countries.
I would urge our members to take advantage of the Commonwealth Chamber’s major events programme focusing on knowledge transfer and trading opportunities in the lead up to the Games. Increasing our exports to these countries can only help to drive much-needed growth, productivity and prosperity to our region as we bounce back from the impact of the Covid pandemic.
