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Why London Needs Company | The Indian Express

Why London Needs Company | The Indian Express

Why London Needs Company

After Brexit, the UK is looking to the Commonwealth to replace EU as trade partner

Written by Girish Kuber | Published: April 12, 2018 12:24:08 am

UK, London, Marden Henge, Neolithic, Britain, Amanda Clarke, Archaeology Field School, Jim Leary, world news, express news
On April 16, around 53 heads of nations or their representatives will descend on London for the four-day conclave.

Can a conglomeration of nations once ruled by Great Britain emerge as an alternative to the EU? That’s the question the business community, politicians and bureaucrats in London are seeking an answer to, as the UK gets set to host the Commonwealth Heads of Government Meet (CHOGM). On April 16, around 53 heads of nations or their representatives will descend on London for the four-day conclave.
Over the past few years, the CHOGM had ceased to create excitement. So much so that no Indian prime minister has taken time off to join fellow commonwealth heads since 2011. Former PM Manmohan Singh skipped two CHOGM meets, while Narendra Modi didn’t attend the last one, held in Malta in 2015.
The forthcoming meet in London, however, appears to be an exception. For, not only Modi but heads of nations like South Africa, Australia and Canada along with many other former colonies would be joining the deliberations. This assumes tremendous significance for two reasons: One, a near Cold War-like situation, where the world is facing dangers of trade wars and two, Brexit. The anxiety over the post-Brexit scenario was palpable in a series of meetings this journalist had last week in London. There weren’t many ministers or officials willing to hazard a guess over Brexit and its aftermath. Interestingly, however, they were all gung-ho about the approaching CHOGM.
It’s quite understandable. According to a survey carried out by a business news agency, Britain faces the danger of losing around 10,000 finance sector-related jobs to neighbouring EU nations if it fails to be a part of the EU’s single market. A large number of financial companies in London have already started scouting for other locations so as to move their operations and staff post-Brexit. Earlier, major investment banks like Goldman Sachs, JPMorgan and Morgan Stanley had indicated their plans to move out of Britain. As it may be a sign of things to come, Lloyd’s of London, one of oldest players in the insurance market, is expected to open its office in Brussels.
This explains why Britain is keen to make the most of the CHOGM. As of now, the EU is the UK’s largest trading partner. According to official government statistics in 2016, UK exports to the EU were $331 billion — 43 per cent of all UK exports. UK imports from the EU were to the tune of $447 billion, which is 54 per cent of all UK imports.
Compare this to the size of the trade amongst CHOGM nations. Trade between Commonwealth members, which was pegged at around $592 billion in 2016, is expected to go up to $1 trillion by 2020. There are equally exciting trade possibilities outside the Commonwealth bloc. For example, with China. The combined exports to China individually from Commonwealth nations have gone up 1,400 per cent in the first decade of the 21st century. With the EU unlikely to remain its biggest trading partner, Britain is eyeing this market post-divorce.
And amongst the Commonwealth nations, it’s India that Britain has pinned high hopes on. The two countries want to expand their bilateral trade manifold from $14.02 billion in 2016. “We are keen that the Prime Minister Narendra Modi attends the CHOGM,” said Mark Field, minister of state for Asia and the Pacific in the Theresa May government. When asked why the UK is so keen on having the Indian PM at the CHOGM, the answer was straightforward: Because India is home to more than half of the Commonwealth nations’ population. Read: One of the largest and fastest growing markets in Asia.
There is another reason behind the UK walking an extra mile in wooing India — the falling number of Indian students and tourists. In 2015, over 4.22 lakh Indian tourists visited the UK. But that is just about 2.13 per cent — a drop from 4.42 per cent in 2006 — of the total number of tourists the UK received. Interestingly, France has recorded more Indian tourists — five lakh — than the UK in 2015. According to a study carried out by the Royal Commonwealth Society, Indians losing interest in the UK has cost the former empire some 8,000 jobs.
No wonder the UK has its eyes set on PM Modi. The obvious issue on the table is expected to be the UK’s partisan approach to granting visas to Indians vis-a-vis China. Currently, a six-month UK visitor visa costs Indians £87 whereas Chinese visitors are offered a two-year tourist visa for the same amount. Indians are made to cough up £330 for a two-year visa.
It’s almost certain that post-CHOGM and the bilateral meet, Indians — tourists and students — will have a more relaxed UK visa regime. For, post-Brexit, the empire needs its confederate more than the other way round.
The writer is editor, Loksatta
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