SPEECH BY THE RT HON HUGO SWIRE MP THE EU AND THE COMMONWEALTH – THE UK’S PLACE IN BOTH CHATHAM HOUSE, 25 MAY 2016 Introduction 1. Excellencies, ladies and gentlemen, thank you for that kind introduction. I am delighted to be back at Chatham House. Given that Her Majesty the Queen is your Patron and Baroness Scotland is one of your Presidents, it is particularly appropriate that I am speaking to you this evening about the Commonwealth – and about why being in the EU complements our membership. 2. Today I want to debunk a myth. The myth that our membership of the EU somehow limits our engagement with the Commonwealth. I will 1 argue that it enhances it. Some have asserted that if we left the EU, UK-Commonwealth trade would increase and migration flows rebalance in favour of Commonwealth countries. I maintain this is wishful thinking. Others suggest that we should choose between the two institutions. I maintain that they are complementary. It is not an either-or choice. The UK needs and can have both. 2 Importance of the Commonwealth to the UK 3. This Government has made clear that the Commonwealth is of immense importance to the United Kingdom. No matter how you look at the relationship – historic, cultural, or our personal ties – our connection with the Commonwealth is stronger now than ever. The fact that Commonwealth citizens resident in the UK have the right to vote in the forthcoming referendum shows just how close that connection is. 3 4. Our commitment to the Commonwealth is clear. A large part of the UK’s aid budget is spent in Commonwealth countries - £1.88 billion in 2013-14. We remain the largest contributor to the Commonwealth Secretariat. And we are looking forward to hosting the first ever meeting of Commonwealth trade ministers in 2017 and the next Commonwealth Heads Of Government Meeting (CHOGM) the year after that. 4 5. And the Commonwealth itself is thriving. From eight member countries in 1949, it has grown to 53. It now covers nearly a quarter of the world’s land mass and more than a third of its people. It boasts a combined Gross National Income of 10.7 trillion dollars, and a youthful population, of whom 60 per cent are under the age of 30. 5 6. The Commonwealth thrives because of its great diversity. Whether large or small, developed or developing, from Canada’s glaciers to the African plains or tropical beaches of the Pacific – the Commonwealth has it all. But it also thrives because, at heart, we have so much in common. Trade, for instance, is on average 19% cheaper between Commonwealth countries due to similarities in our legal systems and language. Being a core part of it is clearly in our national interest. 6 Could Brexit benefit the Commonwealth? 7. So, if we value the Commonwealth, and know that it is going from strength to strength, does this mean we should focus on it - to the exclusion of the EU? Let’s examine the arguments. 7 Migration 8. First, there’s the argument on migration. Some in the leave campaign have made the argument that leaving the EU would allow greater migration from the Commonwealth. But I have not seen Nigel Farage use this argument in public. It wilfully misrepresents the political reality and, to be honest, it is irresponsible and misleading. Frankly, I believe it is naïve to think that the same people campaigning for Brexit would welcome this. 8 9. And what possible basis do they have for making such an assertion? Because - let’s remember - it is already up to the United Kingdom, not the EU, to decide who is allowed to come to this country from outside the EU. Our membership of the EU does not prevent Commonwealth citizens from coming to the United Kingdom. Anyone suggesting that it would be different or easier is just raising false hopes by suggesting we would water down those criteria. 9 10. Nor should we forget that, if we did leave the EU, keeping full and meaningful access to the Single Market would also mean accepting significant trade-offs, including the continued free movement of people. No other country has managed one without the other. 10 Trade 11. Secondly, there is the creeping narrative promoted by the Brexiteers that somehow the Commonwealth can replace the EU as the UK's major trading partner. That is a leap of faith with no basis in fact. Access to the Single Market is a cornerstone of the UK’s prosperity. 44% of what we export goes to the European Union, with 3 million jobs in the UK dependent in some way on trade with the Single Market. 11 12. And it ignores what our EU membership does to facilitate trade with the Commonwealth. Access to the Single Market doesn’t just matter to UK businesses and the UK’s economic future. It matters to the Commonwealth too. 12 13. As businesses up and down the country will attest, we are a gateway to trade with the EU, as well as an important market in our own right. It’s the reason why Australia is a disproportionately large investor in the UK for the size of its economy. India too sees this gateway role as vital. Prime Minister Modi during his visit to the UK last November said “As far as India is concerned, if there is an entry point for us to the European Union that is the UK”. And the head of the Federation of Indian Chambers of Commerce and Industry agreed, adding that: “we firmly believe that leaving the EU would create considerable uncertainty for Indian businesses engaged 13 with the UK and would possibly have an adverse impact on investment and movement of professionals to the UK.” 14. A third argument centres around the idea of a Commonwealth Free Trade Area. It is certainly a fine aspiration. Ultimately, as a Conservative, I believe that free trade is the engine of global growth – and that a rising tide lifts all ships. But it is quite wrong to suggest that Commonwealth trade might be a substitute for the EU Single Market. 14 UK Influence within the EU 15. Rather than harking back to the days of Imperial Preference, we should remind ourselves why the Commonwealth benefits from our close relationship with the EU. Our seat at the table gives the Commonwealth a voice - and it is a voice which brings results. UK membership of the EU is creating jobs and driving growth, in Britain and across the Commonwealth. That’s why our Commonwealth allies want us to stay in the EU. 15 16. But don’t just take my word for it. A host of Commonwealth leaders have come out and said so. Canada’s Prime Minister Justin Trudeau has said that Britain’s clout is “obviously amplified by its strength as part of the EU”. New Zealand Prime Minister John Key has said: “We see Europe as an extremely important continent that needs strong leadership. We think Britain provides that leadership”. Whilst his Australian counterpart Malcolm Turnbull said: “Britain's involvement in the European Union does provide us - and Australian firms particularly, many of whom are based in the UK - considerable access to that market. From our 16 point of view it is an unalloyed plus for Britain to remain in the EU”. 17 Trade 17. Let’s look at the reasons why they feel so strongly. Beginning with trade. Today, the EU has, or is negotiating, trade deals with over 80% of Commonwealth countries. The benefits of these deals are significant for both the Commonwealth and the UK. Canada is expected to benefit to the tune of £5.5 billion a year from CETA - the Comprehensive Economic and Trade Agreement with the EU – and the UK by £1.3 billion. 18 18. The United Kingdom has been at the forefront of efforts to deepen the EU’s trading relationships with Commonwealth countries. We were instrumental in getting the Commission’s agreement to begin negotiations on FTAs with Australia and New Zealand. We continue to push for an ambitious Free Trade Agreement with India. And the UK has consistently advocated a pro-development trade policy, arguing for generous access to the EU market for developing countries in the Commonwealth and beyond. 19 19. We strongly supported the granting of GSP+ status to Pakistan - which reduces duty on exports in exchange for progress on governance and human rights; Pakistan’s exports to the EU rose by 20% in the first year of this scheme. 20. The United Kingdom is working with our EU partners to successfully conclude Economic Partnership Agreement negotiations in West Africa and with the East African and South African Development Communities. The EU is Ghana’s 2nd largest trading partner after China. And in South Africa the EU accounts for a quarter of total exports, and is its largest 20 foreign direct investor, with 2,000 EU firms credited with creating 350,000 jobs. 21. And 14 Commonwealth Least Developed Countries benefit from the EU’s “Everything but Arms” arrangement, which gives them duty-free and quota-free access to the EU for – as it says on the tin - all exports but arms and ammunition. 22. Just think of the overall leveraging effect of all these deals – this isn’t just access to the UK, but to the whole EU, for all 2.1 billion citizens of the Commonwealth. 21 Development 23. And the benefits of our influence go well beyond trade. 24. The EU is the world’s largest aid donor, promoting stability, human rights and good governance.