PM Theresa May on Monday opened the Commonwealth Business Forum (CBF) in London, marking the start of the Commonwealth Heads of Government Meeting (CHOGM) with a message of using the organisation to challenge the forces of protectionism and promote greater trade.
India is among 52 other member-countries participating in the summit hosted by the UK in London around the theme of “Towards a Common Future”. India PM Narendra Modi reached London on Tuesday to attend the CHOGM.
“The 2018 Commonwealth Trade Review predicted that trade between member states will be worth USD 700 billion by 2020 . Yet risks remain. Global growth is fragile. The challenges posed by protectionism are all too clear,” Theresa May said in her opening speech at the Guildhall.
“If Commonwealth businesses are to flourish in such times, if we are to deliver and secure the prosperous future our young people want and deserve, then the Commonwealth and national governments must not be afraid to act,” she added.
The Confederation of Indian Industry (CII) is participating in the CBF with what it describes as a “momentous” delegation of nearly 40 business leaders across different sectors of the country, led by CII President Rakesh Bharti Mittal, Vice-Chairman of Bharti Enterprises.
The Indian business leaders aim to highlight opportunities for intra-Commonwealth collaboration across technology, skills, agriculture and infrastructure verticals as part of the largest Indian delegation of CEOs and young Indian business leaders to any Commonwealth Summit in recent times.
Chandrajit Banerjee, CII Director-General, said: “The key question is what will be the new-age “common” factor in the Commonwealth? India’s trade with Commonwealth nations is 20 per cent of its global trade basket.
“Therefore, business must redefine and lay the foundation for the new evolving architecture of the Commonwealth this presents a great opportunity for Indian business to lead the narrative, whether it is in trade facilitation, seamless movement of professionals and visitors, skills to support new-age employability, sustainability or small business.” He stressed that re-engaging with the Commonwealth at the highest level with Prime Minister Modi’s participation at CHOGM later this week is a “marked strategic shift” for India.
Tripartite or bilateral cooperation for collaboration in third countries is also of significant interest, with new models of collaboration between India and the UK, focusing on joint projects and investments in African countries.
The UK, which is the Chair-in-Office of the Commonwealth for two years, also unveiled a range of new initiatives and networks to mark the launch of CHOGM. Theresa May announced that the UK will be funding a new Commonwealth Standards Network, which will support developing countries in particular to better meet existing international standards.
“It will empower developing countries to have a stronger voice in the international standards community something that has benefits on a global scale,” she said.
The UK will also fund a new Trade Facilitation Programme, supporting and providing technical assistance to selected Commonwealth countries in implementing the World Trade Organisation’s Trade Facilitation Agreement.
And, working alongside the International Trade Centre, it will also deliver a new SheTrades Commonwealth initiative to offer Commonwealth-wide support to help countries break down gender barriers in international trade.
“There is no doubt there is Commonwealth factor trade costs are 19 per cent lower between Commonwealth members. Some members benefit greatly but we can spread that benefit further,” said Charles Bowman, Lord Mayor of the City of London.
“Ask not what the UK wants from the Commonwealth but ask what the UK can do for the Commonwealth,” added Lord Marland, the chairman of the Commonwealth Enterprise and Investment Council (CWEIC) and in charge of the Commonwealth Business Forum, which, alongside Women’s, People’s and Youth forums, marks the precursor to the Heads of Government Meeting on Thursday.
Speaking at the Commonwealth Business Forum, Secretary of State for International Trade Dr Liam Fox set out the UK’s ambition to become the foremost global champion of free trade across the world, driving economic growth and prosperity in the process.
Dr Fox also announced progress with transiting Economic Partnership Agreements (EPAs) covering 30 developing countries, including 24 Commonwealth members. The EPAs will seek to replicate existing arrangements, ensuring continuity in trading practices as the UK leaves the European Union.
The Commonwealth is a key trading partner for the UK with total trade in goods and services increasing by 2.1% £94.4bn in 2016. Canada is the largest trading partner in the group accounting for 16.4% of total trade, followed by India (16.3%) and Australia (13.9%).
International trade secretary, Dr Liam Fox, said: “This summit offers a fantastic opportunity to promote the important value of free and fair trade within the Commonwealth.
“Our shared bonds of history, culture language and laws have the potential to increase trade drastically over the coming years, whilst also reducing the cost of doing business between member countries by up to 19%.
“This government will continue to champion global trade, which has driven prosperity at home and abroad. As we leave the EU the UK is ready thrive and adapt to a rapidly changing world. That is our ambition for all Commonwealth members, and it is the message I will share with our friends and allies throughout this week.”
Dr Fox also announced the publication of a new Joint Trade Review Guide, which will act as a blueprint encouraging trade between member states, following the success of the UK-India Joint Trade Review which was completed earlier this year.
The UK’s credit agency, UK Export Finance have also doubled their support for Commonwealth markets, supporting the likes of the Cleveland Bridge project in Sri Lanka, by offering a US$128m loan to finance the construction of 537 steel bridges to improve infrastructure in rural areas. The agency had the total capacity of more than £20bn to support new business.
DIT will also announce support for the Commonwealth Small States (CSS) Office in Geneva to build its human rights and trade capacity with a £1.3m investment. This will boost CSS participation in the international human rights community as well as those that are unable to independently negotiate trade agreements at the WTO.
A Joint Trade Review (JTR) is a bilateral process being carried out between the UK and a number of its major trading partners. These reviews use empirical analysis and evidence to understand bilateral trade flows, identify potential priority sectors and recognise where the largest barriers to trade exist.
The Joint Trade Reviews between the UK and India and the UK and Brazil began in early 2017, with India coming to a successful completion in early 2018. The Joint working Group (JWG) on Trade under India-UK Joint Economic and Trade Committee (JETCO) agreed the need to develop a proper understanding of the existing trade relationship, and developed the concept of a Joint Trade Review (JTR) as an instrument to do this.
The review progressed with officials in the UK and India undertaking an initial empirical analysis to establish the evidence base relating to existing sectors of bilateral trade between the UK and India, and sectors in which there was evidence that barriers may be inhibiting enhanced bilateral trade flows.
Stakeholder consultations were organised and the feedback received from industry informed the identification of key barriers. This engagement was limited due to tight timescales and resource considerations, and this could be expanded in future, perhaps focusing on prioritised sectors.
The Joint Trade Review process culminated in a joint report submitted to the JETCO in order to underpin discussions of next steps. The report summarises both the findings of the empirical analysis to identify sectors of particular interest to each country, and the stakeholder engagement used to identify key barriers facing businesses in both countries. The report also makes recommendations for follow ups to the review process.
The guide draws largely upon the emerging lessons learned from this review for the design and implementation of Joint Trade Reviews (JTRs) more widely.
This guide has been provided by the UK’s Department for International Trade, working in close partnership with India’s Ministry of Commerce and Industry, to the Commonwealth Secretariat and made available to all Commonwealth members via the website of the Commonwealth Secretariat.
The purpose of this guide is to assist other Commonwealth members to design effective Joint Trade Review processes with the aim of strengthening trade relationships and enhancing trade and prosperity across the Commonwealth.
As the UK prepares to assume responsibility for its independent trade policy, it is engaged in trade dialogues with a large number of countries. The bilateral relationship with India, as a key strategic partner for the UK, is a high priority for both sides, with PM Modi describing the relationship as an ‘unbeatable partnership’.
Both India and the UK view the JTR as an important process for developing an understanding of a bilateral trade relationship. As other countries seek to build on the trading potential of the Commonwealth, we see the value of countries conducting similar reviews between themselves. The guide provided gives an idea of how India and the UK developed the process, and will be of use to Commonwealth countries seeking to improve trade relations with each other.
With over 2.4 billion people, the Commonwealth is home to one third or the world’s population, 60% of which are under the age of 30. It contains some of the world’s fastest growing economies and accounts for one-fifth of global trade. The Commonwealth’s largest members – India, South Africa, Canada, Australia and the UK – make up a quarter of the G20.