Trading on Commonwealth ties

Improving infrastructure – particularly roads, railways and port facilities – can help lower costs and boost trade within the Commonwealth, according to a new book recently published by the Commonwealth Secretariat.

The publication – ‘Trading on Commonwealth Ties’ – is the result of a report prepared by Professor Chris Milner, a Research Fellow at the Globalisation and Economic Policy Centre at the UK’s University of Nottingham.

The Secretariat’s Economic Affairs Division commissioned the report, which was launched at the 2007 Commonwealth Heads of Government Meeting held between 23-25 November in Kampala, Uganda.

The book highlights a number of opportunities for stimulating trade within the Commonwealth but warns against setting up a Free Trade Agreement across the member states.

It says that investment in infrastructure will lead to growth of exports both within and outside the Commonwealth and would also reduce the costs and increase the speed of importing raw materials. This could help Commonwealth countries develop competitive manufacturing industries.

Professor Milner states that while the idea of trying to build a Free Trade Agreement that covers the Commonwealth may hold enormous appeal, it is fraught with legal, administrative and political difficulties.

He notes Commonwealth countries can still improve trade between individual and regional groupings by negotiating fairer tariff deals to increase exports.

Intra-Commonwealth trade currently generates about US$225 billion a year in export trade for member countries, which is equivalent to about 16 per cent of Commonwealth countries’ total exports. This is a substantial volume of trading activity, but overall the bulk of their trade is with countries outside of the Commonwealth.

The book suggests that there is still room for more growth in intra-trade if Heads of Government capitalise on the Commonwealth’s historical culture of co-operation, as well as draw on the shared culture and language in some of the regions.

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