Implement a Commonwealth (CANZUK) Free Trade Agreement

Implement a Commonwealth (CANZUK) Free Trade Agreement - The Australian Taxpayers' Alliance

The Australian government should negotiate a free trade agreement between Canada, Australia, New Zealand, and the United Kingdom (CANZUK), using the existing Australia - New Zealand Closer Economic Relations Trade Agreement (ANZCERTA) as a blueprint.

This CANZUK agreement should allow for unfettered free trade in goods and services, and the free movement of people across these core commonwealth countries.

Background and historical ties

The commonwealth countries that make up CANZUK already share extraordinarily close ties, based on a shared language, culture, and set of political institutions.

The CANZUK countries are all majority English speaking nations. All share a common heritage that can be traced back beyond Magna Carta, and as a result, all have near identical sets of political institutions — Westminster-based parliaments with the same head of state and common law legal systems. This shared heritage has led to remarkably similar societies, based on a respect for individual freedom, the rule of law, and freedom of contract.

CANZUK countries already share close foreign policy ties, and an unparalleled intelligence sharing relationship as four of the so-called “five eyes” nations (the fifth being the United States).

Despite these close cultural and political ties, there is no free trade agreement that encompasses all four states. This is largely due to the U.K.’s decision, in 1973, to join the predecessor to the European Union — a decision that brought the U.K. inside the E.U. customs union, with a drastic effect on trade between the Commonwealth.

However, the U.K.’s decision to support Brexit has opened up the opportunity to strengthen ties between CANZUK with the creation of a free trade agreement.

A CAZNUK Agreement

         i.            Increased trade and influence

The CANZUK countries rank as four of the top 10 most economically free economies. They have a combined GDP of US$6.5 trillion, they are collectively the fourth largest group in the world, with global trade of US$3.5 trillion. Removing tariff barriers could substantially increase trade between these countries, particularly between Australia and the U.K. (currently our 7th largest trading partner, despite the E.U. customs union). This will benefit Australians by providing increased consumer choice and profits from exporting.

Covering a surface area of 18 million square kilometers, CANZUK could open up opportunities for development in unpopulated or regional areas, especially for Canada and Australia. It would be abundant in mineral resources, established in political landscape and secure in property rights. And It’s combined military spending amounts to around US$110 billion, being the world’s 3rd largest.

With these factors, CANZUK could also act as an influential global voice for the pro-trade, liberal democratic values our societies are founded on. Making the member countries major global players.

       ii.            CANZUK free trade as an extension of ANZCERTA

Australia’s free-trade agreement with New Zealand (ANZCERTA) is the perfect blueprint for a CANZUK agreement.

Comprising two of the four CANZUK countries, ANZCERTA already prohibits all tariffs and trade restrictions on goods originating in the free trade area. It contains measures to minimize market distortions, such as export subsidies. It provides for the harmonization of food standards, and for mutual recognition of goods and occupations, enabling skilled personnel to move between jurisdictions. And it contains a protocol to reduce barriers to investment, such as higher screening thresholds.  

This is a comprehensive, popular, and successful trade agreement that would make the perfect blueprint for CANZUK. And with both Australian Prime Minister Malcolm Turnbull, and New Zealand Prime Minister John Key, pledging to present a united front in any post-Brexit trade talks, using ANZCERTA as a blueprint also makes tactical sense.

     iii.            Increased freedom of movement between CANZUK countries

In order for CANZUK to reproduce the full benefits of ANZCERTA, there must be a provision enabling the citizens of members states to freely work and live in each other’s’ countries. This can be done by the creation of a ‘free-mobility labour zone’ between the CANZUK countries.

This would establish the automatic right to move between the CANZUK countries for work or travel purposes. Like ANZCERTA, it would also include provisions for the mutual recognition of occupational standards and professional qualifications. However, reasonable restraints should exist for those with criminal records who pose a risk to society. Likewise, there could be reasonable restrictions on things like voting rights, and the ability of immigrants to access welfare benefits in their host country.

In addition to increasing the opportunities for CANZUK citizens, this would aid the economic growth and prosperity of member countries, as human capital could go where it is most valuable.

Wasn’t Brexit a repudiation of free movement?

Freedom of movement was undoubtedly a major cause of resentment towards the E.U.

Indeed, the U.K.’s inability to restrict E.U. immigration prior to Brexit led to a tightening of visa regulations for non E.U. citizens, including Australians. As a result, 40,000 non-E.U. migrants earning less than £35,000 per year are set to be deported.[8]

Nevertheless, it is unlikely that a CANZUK ‘free-mobility labour zone’ would cause the same controversy and resentment. The shared language and culture between the people of the CANZUK countries will minimize social disruption, as immigrants will seamlessly integrate into their host countries.

This is why there is significant popular support for a free movement among CANZUK countries. In a poll conducted by the Royal Commonwealth Society earlier this year, majorities in all four CANZUK countries supporting the right to live and work freely in each other’s countries. This included 70 percent in of those polled in Australia, 75 percent in Canada, 82 percent in New Zealand, and even 58 percent in the U.K.

Regardless of their attitudes towards the E.U., freedom of movement among culturally and linguistically similar CANZUK countries clearly has support in the U.K.

The next best thing

Short of full free movement, a CANZUK agreement must at least reduce the immigration barriers that currently exist. This could take a similar form to the E3 visa for Australian professionals working in the United States, which exists as part of the Australia’s free trade agreement with the United States.

At minimum it should include increasing the number of visas issued to CANZUK citizens by the U.K’s Home Office (and equivalent bodies in each country), and lifting of migration caps.

This approach already has support in both Australia and the U.K., with Australia Foreign Minister, Julie Bishop, and U.K. Foreign Secretary, Boris Johnson, both speaking favourably about the potential for a post-Brexit immigration deal. Boris Johnson was particularly outspoken about his country’s crackdown on Australian migrants, saying, “It just seems so peculiar to me. We fought together in two world wars. There’s huge cultural affinities, ties of blood relations, God knows what. I just think it’s bizarre. It has not been a great policy, in my view.”

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