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Commonwealth Countries: Trade

Volume 735: debated on Wednesday 15 February 2012


Asked By

To ask Her Majesty’s Government what steps they are taking to boost trade with Commonwealth countries.

UKTI has teams in 20 Commonwealth countries, which help British companies with business overseas and to partner with Commonwealth businesses. These 20 countries represent more than 98 per cent of the Commonwealth’s GDP. In addition, Ministers and officials support the Commonwealth Business Council’s events to encourage intra-Commonwealth trade and to promote the UK as a trading and investment partner. For example, my noble friends Lord Howell and Lord Green spoke at the CBC’s forum in Perth in October and I have to admit that I am a member of the Commonwealth Parliamentary Association.

The Minister knows that 50 per cent of our trade is conducted with other EU countries. These economies are mature and under great financial pressure. By contrast, the Commonwealth contains a mix of mature and emerging economies, some with significant natural resources and great potential for growth. Not wishing to have too many of our eggs in the European basket and given our special relationship with the Commonwealth, will the Minister assure the House that a vigorous approach will be taken to growing our trade with Commonwealth countries?

A vigorous approach is being taken by this country to invest in economies wherever we find them. However, to answer the noble Lord’s question, yes we are doing marvellous business with the Commonwealth and continue to do so. The developed markets of the Commonwealth represent very good opportunities for United Kingdom businesses. For example, our trade with India continues to rise: bilateral trade in 2010 was up 20 per cent and was worth £13 billion a year. UKTI’s activities through our India network of nine offices are building on this. We are moving resources more and more to high-growth markets, many of which are in Commonwealth countries such as India, South Africa, Malaysia and Singapore. However, half our exports go to EU member countries. We will continue to export and do business with every country that we possibly can.

My Lords, should we not recognise that, with all its advantages and virtues, the Commonwealth is not, and cannot be, a trading bloc because of its very diversity, from the Maldives, with its current turmoil, to India, which has just bought French aircraft over British aircraft? To be realistic, should we not look a little more productively at bilateral relations with India and Australia but also with China?

Yes, of course. Exports of goods from the UK to Australia—the example given by the noble Lord—were up by more than 30 per cent last year. We are certainly dealing with the European Union countries, as the noble Lord said, and with as many other countries as we can.

What evidence does the Minister have that the Commonwealth Business Council has been doing the job that is asked of it of promoting trade intra the Commonwealth? Will she examine the basis of how it is operating to see that what might be useful and successful is actually so?

We follow very carefully what is happening in all the organisations. I have a list of organisations to do with the Commonwealth which many Members of this House either chair, have chaired or are part of. Certainly, Commonwealth countries also make excellent springboards into other countries, so we gain not just from the countries that are in the Commonwealth but from the countries that they are close to and can give us introductions to.

My Lords, is the Minister aware that the strength of the Australian currency and its marked appreciation mean that it should be possible for us to sell more products to that country? However, countries such as Australia are not a soft touch. They want quality goods from Britain and they expect people to be out there promoting and selling them. Therefore, does she not think that we want to be very much on our toes in making the most of the opportunities that exist in the Commonwealth?

I would have to agree with my noble friend because she is a fine and proud Australian. As I have just said, exports of goods from the UK to Australia went up by more than 30 per cent last year, so I can only presume that the goods we are turning out are of excellent quality.

My Lords, would the Minister acknowledge the role of Her Majesty’s Diplomatic Service at all levels, and not just commercial staff, but from heads of mission down to locally engaged staff?

It is my pleasure to acknowledge that. Everyone is working together. We are able to place our experts from UKTI in embassies and missions, and we are extremely grateful to them.

Given the importance that the Government attach to involving SMEs in exporting, can the Minister tell us what progress has been made in this area in relation to Commonwealth countries and what the strategy is?

Many SMEs look first to the nearer markets in the European single community because of the shared regulatory regime and the proximity of them. Therefore it takes extra effort on our part to make sure that we help SMEs when they go further afield. We are certainly doing so and I know for a fact that at the Intellectual Property Office we have just started to put envoys into other countries to be able to help small and medium-sized businesses when they try to export to countries to which they would find it quite daunting to export if they did not have the help of the Intellectual Property Office and the embassies.

One of the key factors to emerge at the Commonwealth Business Council conference in Perth in Australia was the greater dependency of Australia and New Zealand on trade with the Asian Pacific zone rather than the West. Has the Minister worked out not the short-term but the long-term implications of how this will affect British trade and the British economy?

Our exports are up everywhere and we are talking to everyone. I just hope that if my noble friend has any more new ideas that we are missing out on he will let me have them.