Intra-Commonwealth trade projected to increase to $1 trillion by 2020
This week the Commonwealth of Nations released its Commonwealth Trade Review 2015 entitled “The Commonwealth in the Unfolding Global Trade Landscape: Prospects Priorities Perspectives”. The report which was released ahead of the Commonwealth Heads of Government meeting in Malta this week details the trade performance and trends in the 53-state voluntary grouping and discusses prospects for future intra-Commonwealth trade. The Commonwealth comprises a diverse set of countries, most of which are former British colonies. It includes developing and developed countries, as well as small states and land locked states.
Though not a trading bloc, trade amongst Commonwealth states is already substantial and growing. Intra-Commonwealth trade has grown almost 10% annually since 1995 and was estimated at $592 billion in 2013. It is projected to reach over 1 trillion in 2020.The report emphasises that there is scope for more intra- Commonwealth trade due to the historical ties, shared values, long established trade, familiar administrative and legal systems, use of the English language mostly and strong diasporic communities.
Some key points from the report:
- Total combined Commonwealth exports of goods and services were $3.41 trillion in 2013 and accounted for 14.6% of global exports in that year.
- Developing Commonwealth states increased their share of Commonwealth exports from 36% in 2000 to over 50% in 2013. This expanded share was attributed mainly to Asian countries which comprise 4/5 of total Commonwealth developing country exports in 2013.
- Merchandise exports comprised 76% of all Commonwealth exports while the remaining 24% is services exports
Commonwealth Caribbean Trade
Caribbean states, along with Pacific states, comprise the majority of small states in the Commonwealth. The report reveals that:
- Total Commonwealth Caribbean exports in 2013 comprised only 1.14% of total Commonwealth exports of goods and services and 2.25% of total Commonwealth developing country exports of goods and services.
- Commonwealth Caribbean exports have grown from 14 billion in 2000 to 39.1 billion in 2013 and are forecasted to reach 41.2 billion in 2015.
- Trinidad & Tobago accounted for 60% of all Commonwealth Caribbean goods and services exports in 2013, with its total exports of goods and services reaching 24.7 billion in 2013. The other top Commonwealth Caribbean exporters were Jamaica, the Bahamas and Barbados.
- Intra-Caribbean exports account for 55 per cent of Caribbean members’ intra-Commonwealth exports, while developed countries accounted for 40% and developing countries was 25% in 2013.
- Services accounted for 60% of Commonwealth Caribbean countries’ exports in 2013 and were dominated mainly travel trade, followed by transport and other business services.
Other major points made in the report:
- Commonwealth small states’ share in world trade has declined from over 0.7% in 1980 to just 0.46% in 2011, with loss of preferences being a major factor. Small states are also faced with declining export orientation of their economies; export GDP ratio of small states has fallen while it has risen globally. This is compounded by the numerous competitiveness challenges small states face, including their small domestic markets, unfavourable geographical location.
- China has grown as a major trading partner in the Commonwealth, with Commonwealth States exports to China increasing from 19 billion in 2000 to 268 trillion in 2013, while Commonwealth states’ imports from China have grown from $16 billion in 2000 to $359 in 2013.
- The report also mentions the many opportunities which exist within the Commonwealth for enhancing trade and suggests ways in which developing countries can improve their trade performance. These include through the use of trade preferences, aid for trade, addressing the implementation gap, promoting the role of private sector and the global trade support architecture.
The full report is available on the official website of the Commonwealth here.