Carl Mortished: Commonwealth trade is not a rational solution to Brexit

Carl Mortished
Trade talks: Prime Minister Theresa May and Indian Prime Minister Narendra Modi arrive for a visit to the Francis Crick Institute in London P: PA

Theresa May’s latest big idea about trade has been blasted to smithereens, holed below the waterline, sunk even before the vessel left port.

She thought the Commonwealth might rescue Britain from the big hole that will be left when we quit the European Union.

Unfortunately, her plans for a new, non-imperial British trading empire have been sabotaged at the very outset by the embarrassing news that the Home Office may have unlawfully deported Commonwealth immigrants from the Caribbean who were carried off the good ship Empire Windrush as babes in arms in the sunset of the British empire but whose citizenship rights were never properly recorded.

There has been a grovelling apology from the Home Secretary, Amber Rudd. You might think this is just one of those bureaucratic mix-ups come to light, predictably, as the Commonwealth Heads of Government Meeting gets underway in London.

But it’s more than that because it reminds us that this Government doesn’t really get trade.

Trade is not about stuff. Contrary to what people say, it’s not about making things for foreigners in distant countries or even about services, doing stuff with foreigners’ money. Trade is about the new people you will meet today and tomorrow.

It’s about exposing your business to more people than you can reach on your home patch.

Without lots and lots of people from other places, trade does not happen. It explains why London — a city built on a river 2000 years ago by people who came from Rome — is so good at trade. It may explain why Doncaster is less good at trade.

If the flow of people dwindles, trade opportunities diminish.

The Commonwealth is full of people — more than two billion — and a few member states, such as India, are rapidly expanding markets; ripe, thinks the Government, for a bit of commercial arm-twisting.

The 53 nations of the Commonwealth account for just 9% of the UK’s global trade whereas the EU takes up 43%. Surely we could do more with India and the other 52 nations to fill the gap.

Probably not a great deal more because many of the Commonwealth countries count as developing countries that already get privileged access to the EU (and therefore Britain) at low or nil tariffs for most of the stuff they sell.

Their main concern about Brexit is preserving privileged access to the UK when we leave the EU customs union.

Of course, India would love to get even more access to the UK but in practice that means visa-free travel for Indian IT professionals — this was spelt out at length by India’s prime minister Narendra Modi to May on her last trip there.

What Britain wants is access to India’s government procurement market and the removal of huge tariffs that protect its domestic industries from competition.

There is no particular reason why India should give up such protection in a solo deal with Britain that has so far proved unobtainable with a much bigger prize, such as the EU or US marketplaces.

And for India, the attraction of the UK is not as a product marketplace but as a place to get training, jobs, work experience that can then re-exported back to Indian software and professional service companies.

It’s the migration thing, the flow of people, the one thing that the Prime Minister has promised to curtail and that Brexit promised to end.

As the residue of an almost-forgotten empire, the Commonwealth has no trading significance.

It served its purpose as a place where Britain could once sell its manufactured goods, free of real competition.

Today, British Leyland and Imperial Chemical Industries are just fading memories of a cosy uncompetitive era.

India can buy better industrial products from Germany, Japan and Korea.

Commonwealth countries need to trade more with their neighbours, the first port of call where a business can find new customers and buying and selling begins. There is no reason for Caribbean nations to look across the Atlantic to Britain when the world’s biggest commercial market is in their backyard.

If the Commonwealth is to find a role in today’s world, it needs to stop staring at Britain and look to its own people and build opportunities at home. Brexit is not a Commonwealth problem and there is no reason why the Commonwealth must provide a solution.