Towards a New Informal Empire

Backbencher May 15, 2013 3
Towards a New Informal Empire

Allrik Birch

Last week I talked about how Britain could temper any (unlikely) damage done to trade through withdrawing from the EU by building trade links with Commonwealth nations, nations who are already moving in the direction of free trade, as well as the US, with which we share strong cultural links.

I suggested that there was a third option we might take alongside this. In the past Britain had both a formal empire (the one people talk about), and what academics refer to as an informal empire. These were trade deals or close ties between Britain and other independent nations around the world. Often in the form of what would nowadays be called a Preferential Trade Agreement (PTA). This often meant high investment from British companies and individuals in what were seen as high growth markets as well as cheap goods for British consumers.

Britain did have preferential trade deals of one form or another with most of South America, Egypt, the Ottoman Empire and Siam (Thailand) during the 19th century. Britain also used its work to stop the slave trade to establish trade links with Niger, Dahomey (now Benin), Abyssinia (Ethiopia) and Zanzibar (now part of Tanzania). Now, I’m not arguing for a return to the sort of Gunboat Diplomacy that is Lord Palmerston’s foreign policy doctrine that was connected with many of the above deals. What I am arguing is that we should adopt a similar practice in creating trade deals to the informal empire for nations outside the Commonwealth. Nations like South Korea and Thailand that are already looking out to sign trade pacts.

There are huge opportunities out there for a nation like Britain to take advantage of with a trade deal. Currently, China is taking almost all the spoils in Africa and to some extent the middle east. Where it used to be Britain or the US investing in infrastructure in the developing world, China is taking on the mantle. Britain, trapped inside the dwindling customs union that is the EU, can only watch as world geopolitics swings against it.

Let’s run through the best of the bunch:

aseanASEAN (Thailand, Myanmar, Malaysia, Indonesia, the Philippines, Vietnam, Singapore, Cambodia, Laos) or individual members within. This is a highly interesting bloc for Britain to consider, it already contains two Commonwealth nations, as well as Thailand, with which we have a good trading history. On top of this it has the nations of Indonesia, the Philippines and Vietnam, all of which are becoming highly important to world trade, the latter taking on a large chunk of what was China’s preserve, ultra-cheap consumer goods. An added advantage with the Philippines is that the country is largely English speaking, with an estimated 76 million speakers in the country. So important is the language that teaching English to foreigners is becoming an increasingly important industry in the country. Whilst it might be more in line with British style to create links with these counties individually, it would still be no harm to get a deal reducing barriers with the bloc as a first step.

South Korea, a now very much developed nation, has arguably the best high-tech sector in the world. Having stronger ties with this nation, and a better trade deal than the EU could ever offer, should be high up the Foreign and Commonwealth Office’s wish list for trade deals. It would also be a ridiculously easy deal to gain, with South Korea actively seeking trade deals around the world. If Britain avoids making the process too bureaucratic, we could realistically sign a proper free trade deal in weeks of leaving the EU, if not days (assuming preliminary negotiations would be under way come leaving time).

Chile, a nation with strong history with Britain, going back from before Pinochet and the Falklands war to our original informal empire. They have got plenty of trade deals already, and would be an easy target for a middle-sized developing market. The richest nation in South America (on per capita terms) would do rather nicely for other foreign policy goals as well, if you think along those lines.

Mexico, joined with the US and Canada within the NAFTA bloc, might be happy to follow one or both of those nations in joining with Britain in a stronger trading relationship. Mexico already has such an arrangement with EFTA and something of a deal with the EU; the large market is not something that should be ignored.

Turkey, a nation sat on the edge of Europe, already has trade deals with the EU and EFTA and would be eager to sign another with Britain (and perhaps a less restrictive one at that). The greatest threat to Britain trade-wise from leaving the EU might well be the loss of the deal we have here, it should not be forgotten.

Perhaps slightly less eager than the above, but still very much worth considering is the world’s third largest economy, Japan. They do have a number of free trade agreements already (mostly within Asia), as well as a need to boost their economy. A possible option on the horizon.

There are also a number of smaller nations which have shown themselves eager to sign trade deals wherever possible. We should welcome these nations, there is always some comparative advantage to be had. These nations include (in no particular order): Costa Rica, Peru, Israel (potential boycotts aside), Tunisia, Saudi Arabia (as part of Gulf Cooperation Council), Jordan, Panama and Taiwan.

That list is by no means exhaustive, there is an incredible number of opportunities out there for the UK or any other nation to reach out and grab, if only they rejected the protectionist doctrines that plague their political and chattering classes. We need not be scared of EU exit for lack of trading options. The world is our oyster, let us explore

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