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Lilico: In what areas might the CANZUK countries work together?

Geopolitical partnerships must start somewhere. What we today call the “European Union” began with a series of so-called “communities” agreements. First, in 1951, there was the European Coal and Steel Community. Then there were proposals for a “European Defence Community” and a “European Political Community”. When the European Defence Community proposal was abandoned, attention switched to the “European Atomic Energy Community” and the “European Economic Community”. From 1967 these and the European Coal and Steel Community were combined into the “European Communities”.

In the case of CANZUK, the most natural start-points are probably not coal and steel or atomic energy. Instead, we would begin with a free trade agreement, a migration agreement and a defence and security partnership. But it is important to understand that the merits of CANZUK deals in these areas are not stand-alone.

For example, in the UK folk ask why one should consider a CANZUK deal any sort of priority when the UK’s total trade with CANZUK constitutes around 3 per cent of its trade whereas trade with the EU is about 40 per cent and trade with the US around 15 per cent. One reason not to be neglected is that trade within CANZUK could grow. When the UK joined the EEC in the early 1970s the EEC6 constituted only around 16 per cent of UK trade; today it’s around twice that. A further reason is that CANZUK itself could add extra members, as the EEC did.

But a more fundamental reason is that CANZUK is not, any more than the EEC or the Warsaw Pact or many other such arrangements have been, mainly a trade deal. Instead, the CANZUK trade deal would be just one component of a much broader geopolitical partnership.

What is a “geopolitical partnership”, though, in more concrete terms? It is an agreement (perhaps never quite stated explicitly) to work together over a range of globally relevant issues, so that by working together the partners can achieve more than they could by working alone. To get things going, one must begin in areas that the populations and politicians of the countries concerned see concrete gains from. France and Germany had obvious reasons for seeing initial potential to cooperate together in coal and steel and food production. Once that got going, there were other clear gains in facing down Communists in Eastern Europe and in absorbing post-dictatorship states in Southern Europe.

The modern world and the nature of their economies and populations and histories means that the initial interests of CANZUK are different. They are all natural free trade advocates internationally. So a joint free trade deal is something concrete to begin with. The populations are all heavily in favour of joint migration freedom and see very concrete personal gains in that (gains that would be mutual, with emigration opportunities being just as important as immigration ones, unlike many migration agreements which are mainly about “how many immigrants do we accept”), so a joint migration deal is another obvious step. History and existing partnerships such as the Five Eyes, in combination with a desire, particularly on the parts of Canada and Australia to be able to defend themselves without total reliance upon the US, makes a security partnership covering defence, terrorism and areas such as cybercrime an obvious next extension.

But a CANZUK geopolitical partnership would not and should not stop there. Much of its purpose and advantage would lie in its being able to go vastly beyond the simpler free trade deals or NATO-style defence agreements others can participate in. Because of its very similar and interoperable legal systems, business cultures, regulatory frameworks and other natural affinities, cooperation could extend to many other areas.

Here are a few. Patent and other intellectual property agreements

Here there are important international distinctions, and CANZUK members may wish to coordinate. For example, Canada and Australia have a twelve month “grace period” between when an invention can be revealed to the world and when it is no longer considered novel if no patent has been filed; the UK currently does not. Global environmental agreements

In the past there have been very successful environmental accords over issues such as Acid Rain and Chlorofluorocarbons (CFCs). Recent attention has focused upon problems with securing international agreements over carbon emissions and the collapse of international cooperation of which the Trump administration drastic budgetary cuts are merely the most recent symptom. But that should not lead us to the conclusion that we cannot, in the future, secure global agreements as important and successful as those regarding Acid Rain or CFCs.

Even in respect of CO2-related climate change, if global warming resumes in due course as predicted, there will need to be work done on adaptation. There will also be issues for which CANZUK members will have specific and globally unusual interests, such as the rules that should apply if the Arctic or Antarctic have much less ice and offer more scope for commercial exploitation. Defence agreements may even be important — e.g. enforcing Canadian claims to the North-West Passage, protecting shipping crossing an ice-free Arctic from piracy, or protecting the Antarctic from poachers. And there will be new environmental challenges and deals to cut in the future that we cannot even imagine today, to which CANZUK members would offer important inputs. Agreements concerning global capital movements

Just as CANZUK countries will have a natural interest in the mutual flow of labour, so they will naturally be interested in the flow of capital. The UK, for example, is already a major investor in other CANZUK states. One area for natural agreement concerns international financial regulation. There are global bodies at which such regulation is set, such as the Basel Committee on Banking Supervision and the International Organization of Securities Commissions (IOSCO). With their similar regulatory philosophies and attitudes to the relative roles and responsibilities of the market and government, CANZUK countries would make very natural allies at these international forums, and might even find caucusing attractive in due course. Other relevant questions on which CANZUK might work include includes agreements over tax avoidance, where the OECD coordinates agreements such as the “Base erosion and profit shifting” (BEPS) programme or broader investment agreements.

One area where there might be natural scope for a CANZUK-specific arrangement (as opposed to joint or coordinated CANZUK input into global agreements) would be takeover codes. Governments are often suspicious of foreign takeovers. CANZUK states have tended to be rather more open to foreign capital. But even CANZUK states can be suspicious of foreign takeovers under certain circumstances. For example, in the UK in 2016 there were doubts about whether it was appropriate to allow a Chinese takeover of a UK energy company, because of the strategic threat this might present if relations with China were to deteriorate. By contrast, it should be straightforward for CANZUK members to have an agreement to deem takeovers by firms from CANZUK states to be treated exactly the same as domestic takeovers. Agreements concerning the internet

Given their geographic separation, CANZUK members would have a natural interest in how the internet is managed and policed. They might for example offer joint views on technical standards and protocols, or on rules for the authorisation of payment systems. Agreements concerning air transport and space transport

Given their geographical separation, CANZUK states would have an obvious interest in high-speed transport systems such as air (or, in the future, space or even Hyperloop) transport. They might therefore make agreements amongst themselves or participate jointly in international accords in these areas.

They might also jointly sponsor relevant research — e.g. into Hyperloop or space-plane systems. One potentially relevant point to note is that transport systems evolve to serve needs just as much as their innovation creates possible wants. If it became advantageous to get from Montreal to Sydney in four hours, there would naturally be much more research conducted into how best to do it. Agreements concerning space exploration and the commercial exploitation of space

There is a joint European Space Agency. It is natural to imagine that a CANZUK geopolitical partnership would, similarly, coordinate some of its space exploration and commercial space exploitation efforts, exploiting some of the natural complementarities between CANZUK members — e.g. Canada has a very strong position in space-based radar technologies whilst the UK is strong in satellite technologies and has recently opened the Institute for Space and Earth Observation in Leicester, whilst Australia offers unique geographical positional resources for launch and downlink. Sponsorship of culture and the arts

One of the attractions of CANZUK is its shared culture. Each of the individual countries has its own specificities, of course. Welsh, French and Maori speakers are just a few examples of CANZUK’s linguistic diversity. Scotland has its own Parliament and separate legal system, whilst the First Nations and the Aboriginal Australians have their own special statuses and unique histories. And there are also other important communities such as the Pacific Islanders in New Zealand or the British Jews.

But despite having this richness to call upon, there remains nonetheless a set of core similarities to CANZUK culture that we recognise — humour; music; films; drama. Britons watch New Zealand daytime soap operas, put Australian singles to Number One and laugh heartily at Canadian comedians. The same is true across CANZUK.

This shared understanding and appreciation of culture would make it natural to have joint sponsorship of cultural events — music festivals, fine art, modern art, authors, interpretative dance and so on. Conclusion To get CANZUK going it will need to have achievable first steps that deliver concrete gains for the politicians and populations of the members. The easiest to understand are probably a free trade agreement, a migration agreement and a defence and security partnership. But we should think of CANZUK as a geopolitical partnership that provides us with the potential for many forms of coordination and joint action, across a wide range of economic, political, scientific and cultural life. I have sketched just a few areas here. Others could sketch more. Let us begin.

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