CANZUK and CPTPP: just naïve fantasies?

Political and economic union of Canada, Australia, New Zealand and the United Kingdom (CANZUK)
By tang90246

The word panacea is defined as ‘a solution or remedy for all difficulties or diseases’. Get used to hearing a lot of these over the next few years as the government and its supporters try to justify and find benefits from Brexit. Whilst being interviewed by Adam Boulton on Sky recently, Lee Rowley, a deputy chair of the Conservative party looked aghast as he was asked the quite simple question of ‘What do we gain from Brexit?’ He flatly couldn’t answer. As some twitter users pointed out, the only benefit seemed to be the irony of ‘a close relationship with the EU’ and a couple of trade deals.

This is nothing new, as there have already been several attempts to find a panacea that can answer the inherent contradictions of Brexit. After 1 January 2021, for probably the first time in history a trade deal will be erecting barriers and introducing friction, rather than reducing them. The government can’t change the fact that 47 per cent of our goods and 37 per cent of our services are exported to the European Union (and 52 per cent and 50 per cent in terms of imports respectively).

The first grand plan proposed to replace this economic activity was the supposed Empire 2.0, the fanciful idea that far-flung former colonies of the British Empire, could somehow replicate the sophisticated trade between the UK and the EU. Never are the former colonies asked about their views on this arrangement. Indeed, many of their writers and journalists have completely mocked the idea, it going down in centres such as Nairobi and Delhi like ‘a lead balloon’. The fact that Britain put misplaced faith in Commonwealth trade post war and achieved little lasting benefit is lost on a government oblivious to repeating past mistakes.

A related idea promoted by many prominent leavers is called CANZUK. This seems to be another naïve panacea built on nostalgic dreams of resurrecting a lost Empire. It proposes that Britain, Canada, Australia and New Zealand would form a strategic and close economic partnership. Again, what would  our potential partners gain  from the proposed arrangement?

CANZUK’s proponents have produced their own programme of proposals, which include freedom of movement between members, common foreign and defence policy and a near complete eradication of trade barriers. It seems odd, that the first two proposals, mimic what we were supposedly trying to escape from within the EU. Why are these countries any different? There is perhaps a slight undercurrent of bigotry in wanting to have ‘people like us’ but not an ‘other’ with supposedly foreign values and culture. Equally strong arguments could be made for closer co-operation with other anglophone nations who have strong historic links, but the likes of India, South Africa and Kenya are clearly snubbed with a lack of an invitation to the great CANZUK party.

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The trade benefits are equally dubious. The leaders in Canada, New Zealand and Australia at least seem to recognise that one barrier to any ambitious trade settlement is due to the leavers’ principal enemy, geography. They realised this much quicker than their former colonial power. During the 1960s, Britain equivocated about whether it should be closer to Europe or stick with the Commonwealth (as usual, trying to have its cake and eat it too). Canada, Australia and New Zealand were looking to the future. In the 1950s and 1960s, New Zealand and Australia signed new agreements with Japan to help re-build Japan’s post-war economy and Canada realised the potential of its huge border and market with the United States.  

As the years after 1973 (when the UK joined what became the EU) passed, it was economic logic for Australia and New Zealand to become more integrated into the Pacific sphere, especially as trade with China grew, with Canada in the Atlantic sphere and Britain in the European sphere. When Brexit happened, Britain suddenly was the odd one out. Britain had ‘won’ something that it didn’t really know what to do with, a booby prize that it had to make work.

Trade deals with these countries will have negligible effects. Britain is struggling to roll-over its existing trade deal with Canada because of its ‘limited capacity’ to do so, according to Justin Trudeau, whilst a deal with New Zealand may even shrink the UK economy.

Connected with the fantasy of the proposed CANZUK is the idea that the existing Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a legitimate alternative to EU or Single Market membership. This is the economic equivalent of climate change scepticism, but because it is related to Brexit, normally sensible media outlets will give it a hearing in the interests of ‘balance’. This panacea, which is supposedly going ahead, would see Britain joining eleven other countries thousands of miles away in the Pacific region (note Australia, Canada and New Zealand are members).

There is a reason no country outside the Pacific region has tried to join it before. Firstly, Britain’s industrial chains are just not integrated into the Pacific region in any meaningful way and secondly, it will not make any substantial economic difference to Britain (or any European country for that matter) if it joins.  Another awkward fact is that Britain will have to accept a ‘take it or leave it’ deal and cannot re-negotiate the 5,000 pages already agreed. The agreement also covers many areas such as labour standards and the environment. If the UK government cares so much about an absolute pure form of sovereignty, why leave one rules-based organisation only to join another?  

All three of these different panaceas. Empire 2.0, CANZUK and the CPTPP, are part of the same way of thinking: the idea that Britain despite being in Europe is somehow ‘exceptional’, bigger and better than an ordinary European country. Grim reality is likely to burst this particular bubble and eventually the penny will drop that Britain can only thrive economically through as close as possible a trading relationship with the rest of Europe.

The last irony is that if the UK does get a close relationship with an alliance outside the EU or even one with the bloc itself, it will likely become the very myth that Cummings, Gove and Johnson have always propagated, a vassal state with no real power over the rules.