CANZUK, again

CANZUK is an idea that has been floating around for a while now … I started talking about it some 3½ years ago when I read an article by Dr Andrew Lilico in the Financial Post. His idea was, and remains, simple: The British, he said, voted to leave the EU because they “did not have quite enough cultural and constitutional similarity with their partners to take the final steps towards political union. It also didn’t help that, towards the end, the alliance included countries of much lower income levels.” The latter pint is something called “wage dumping” by some. It occurs when there is free movement of labour between countries and workers move from poor (low wage) to rich (higher wage) countries and then agree to work for less than the natives, thereby forcing down wages, and living standards, for all.

Dr Lilico asked himself, “are there any countries out there with similar values and similar income levels with whom the British have greater cultural and constitutional similarity?” That question, he said, answered itself and it was, and still is CANZUK …

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some sort of union of Canada, Australia, New Zealand and the United Kingdon … although how long the British kingdom might remain united seems, to me, to be an open question.

Dr Lilico pointed out that, then, the income levels were fairly similar: “in 2014, the U.K. had a GDP per capita of about US$46,000, versus US$44,000 for New Zealand, US$50,000 for Canada and Australia a little higher at US$62,000.” The 2018 figures (from the World Bank, all in US dollars) are: NZ: $41,945, UK: $42,943, Canada: $46,233, and Australia: $57,373. They are still all within a fairly narrow wage ($(US)15,000) which indicates similar wage rates and standards of living across the four countries. That matters when wage dumping is an issue.

He also pointed out that all four countries are liberal democracies with a common political, parliamentary system and very similar, liberal socio-economic values.

The notion was taken up by Erin O’Toole during his 2017 Conservative leadership campaign, and he has, just days ago, raised it again:

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Now, let me be very clear; I wholeheartedly favour a CANZUK arrangement. But not just any arrangement, I am very sceptical about some of Dr Lilico’s ideas. In my opinion, a good, useful CANZUK arrangement must:

  • Be trade based ~ essentially, it needs to be a global free trade arrangement that is a mix of the CETA (the Canada EU trade deal which should form the basis of a (fairly quick and easy, I think) CANUK free trade deal) and the CPTPP (which we negotiated with Australia and New Zealand and which might welcome Britain, too);
  • Allow for enhanced mobility, at least ~ it may not, perhaps should not allow for complete freedom of movement but it should be better than today’s arrangements, especially for post-secondary students and working people ~ those with a firm job offer in one of the four countries; and
  • Not be a formal “alliance.”

A good CANZUK arrangement need not be, indeed must not be, as some have phrased it, “nostalgic nationalism,” rather, it must recognize that rather a lot of productive synergies can be achieved when similar counties decide to work together for their mutual advantage.

Now, I see a very recent article in the Sunday Express, by Marco Giannangeli, the paper’s Diplomatic Editor, which says that a plan (but I think that ‘plan’ is too strong a word) “revealed by potential future Canadian PM Erin O’Toole MP on the weekend that Britain left the EU, would see Canada, Australia, New Zealand and the UK ease migration, bolster defence sharing and increase trade between the four Commonwealth nations. Together the “natural allies” of 136 million people account for more than £4.3trillion in gross national income and around 10 percent of the world’s wealth. They also share close strategic relationships with the US through the “Five eyes” intelligence community, the American, British, Canadian, Australian and New Zealand Armies’ Program and a programme to provide interoperability between navies. The so-called Canzuk plan, an expansion of the Closer Economic Relations Trade Agreement currently enjoyed between Australia and New Zealand, already has the backing of Boris Johnson, who last year said: “If we can do something better with Australia, Canada and New Zealand we certainly should” … [and] … Last night Bob Seely MP, chair of the Canzuk All Party Parliamentary Group, confirmed the FCO had started to make plans.

There is, to be sure, more hope and dream than ‘plan’ in all this, but it is, also, more than just pie-in-the-sky, and it is a lot more than mere Anglospheric nostalgia, too. CANZUK makes enough economic, social and political sense on its own terms to merit some serious consideration. It will not be simple. Australia, for example, will be asked to treat (larger) Britain and Canada as it treats tiny, neighbouring New Zealand. Neither Australia nor Canada will want an unregulated surge of British immigrants. But, both will benefit from free(er) trade with Britain, especially in resources and agriculture, and both will welcome some increased British immigration.

A CANZUK arrangement will not be popular in Québec because increased immigration from CANZUK countries will further dilute the already shrinking ‘French fact‘ in Canada. But it will, likely, have solid support in most of Canada. A well crafted CANZUK arrangement might make Canada (and Britain) slightly less dependent on trade with the USA, and that would be a good thing.

 

3 thoughts on “CANZUK, again

  1. I think that even in the event of a break up of the UK (something I don’t actually expect) I could see some sort of Commonwealth/CANZUK association that might even incorporate Ireland and, if necessary an independent/autonomous Scotland.

    The Irish may love their songs but they love their money as well. With out Britain in the EU how long will Ireland be allowed to keep its 12% Corporate Tax Rate? What will it do when Britain introduces Tax Free Ports – which even the SNP is now demanding from London – and drops its Corporate Rate to 12%? And Ireland faces the reciprocal tariffs demanded when the EU imposes them on the UK? And who will bail them out again when the Euro takes a slide?

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