What can the Commonwealth deliver on trade?

In June, senior officials will meet to operationalise the grouping’s Commonwealth Connectivity Agenda adopted on during a Commonwealth Heads of Government Meeting in London last March. A full-blown free trade agreement of the Commonwealth is not on the table. But the Commonwealth can nonetheless deliver concretely on boosting trade. This is how.

In 2015, the Commonwealth secretariat undertook the first systematic evaluation of intra-Commonwealth trade and investment patterns. The end result of that research highlighted that intra-Commonwealth trade expected to rise to reach around US $ 1 trillion (£ 750 billion)  by 2020.

The Commonwealth comprises a very diverse set of 53 member countries from Africa, Asia, the Americas, Europe and the Pacific, which are amongst the world’s largest, smallest, richest and poorest countries.

Despite its members’ big differences, intra-Commonwealth trade trends are underpinned by a 19 percent ‘Commonwealth’ cost advantage, derived from common factors including, but not limited to language, culture, institutions and legal frameworks, partly inherited from the colonial era.

These findings underpinned a dedicated trade ministers roundtable discussion in March 2017, which reflected on what proactive measures could be adopted in existing institutional frameworks for intra-Commonwealth trade and investment collaboration. They coalesced around a Commonwealth Connectivity Agenda, comprising clusters of activities related to connectivity within the following realms: physical; digital; regulatory; business-to-business; supply-side; sustainability and inclusivity.

This agenda passed with relative ease through Commonwealth Foreign Ministers at the Commonwealth summit last March in London. That decision was perhaps bolstered by findings from the 2018 Commonwealth trade review which showed that member states were hard hit by the global trade slowdown between 2014-16, with an estimated US $700 billion (£ 525 billion) of intra-Commonwealth trade projected by 2020 without proactive measures.

Leaders committed themselves to double intra-Commonwealth by 2030, and expanding intra-Commonwealth investment. This is to be achieved through effective implementation of the Commonwealth Connectivity Agenda for Trade and Investment.

Alternative form of trade dialogue

There is much to build on. The new findings from the 2018 Commonwealth Trade Review, suggest that every incremental improvement in government effectiveness, boosts intra-Commonwealth trade. They also suggest that regulatory convergence reduces trade costs. The review also revealed that members generally enforced commercial contracts more swiftly, taking 20 per cent less time compared to the rest of the world – this is related to common law heritage and similar regulatory backbones.

Already, intra-Commonwealth greenfield investment, eased by what is called ‘tacit knowledge’ of how markets work obtained through direct experiences, shared experiences and communicated informally, means that members tend to invest more than three times more with each other than with the rest of the world.

The movement towards new models and approaches of trade and development cooperation amongst member states is timely. Conventional trade governance structures are being tested, as the crisis of nomination of Appellate Body in the World Trade Organization suggests. It is clear that national policy makers must better engage with trade policy decisions. New forms of dialogue are required.

The Commonwealth Connectivity Agenda will provide a trusted forum for members to exchange best practices, approaches and experiences to trade and investment. This cross-fertilization can contribute to further reducing trade frictions among members and provides space away from the give-and-take of trade negotiations to learn and create new approaches to addressing existing and emerging trade and investment challenges.


The Commonwealth remains a voluntary organisation and not a formal trading bloc, but it offers a structured and systematic dialogue mechanism, which can lead to improved trade and investment outcomes. There are precedents, as many Commonwealth members of the Asia Pacific Economic Community (APEC) will know.

APEC is a group of 21 countries set up in the 1990s to address trade concerns of economies located in the Pacific frim. The group is economically and geographically diverse and includes countries such as the United States, China, Russia, Australia, New Zealand, Canada, Japan, Indonesia among others. APEC has delivered on specific collective actions on trade facilitation aiming to reduce costs at customs, and more recently, a services cooperation agreement which aims to introduce more competition and consumer choice in the services sector.

These APEC measures do not duplicate those agreed by members within other forums such as the World Trade Organization or bilateral or regional free trade agreements. But they do consolidate them and ensure much greater sensitisation amongst policy makers and their respective business communities. This enhanced dialogue invariably garners increased attention, through an action orientated implementation agenda.

There is every reason to believe that similar models of cooperation can be pioneered elsewhere, such as in the Commonwealth. In a complex and rapidly changing fast paced global trading landscape, which has seen economic convergence as well as divergence, it is surprising that greater interactions between trade policy makers in the Commonwealth has not come sooner.

With the majority of the Commonwealth comprising small states – with many of these depending the most on intra-Commonwealth trade as a proportion of their total trade – any intervention to boost these flows can assist in the advancement of the trade-related Sustainable Development Goals and the 2030 Agenda, so urgently needed.


This article has been developed by Dr Jodie Keane, Economic Adviser, Trade, Oceans and Natural Resources Division, Commonwealth Secretariat. The views expressed are those of the author and do not represent those of the Commonwealth Secretariat.



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