Commonwealth Heads of Government Meeting

Lord Sheikh Excerpts

Thursday 17th December 2015 Lords Chamber

[Lord Sheikh (Con)]

My Lords, I also congratulate the noble Lord, Lord Luce, on initiating the debate. I will use my limited time to focus on the need to build our overseas trade relationships.

There is great demand across the world for the establishment of regional trade agreements to help individual economies without putting sovereignty at risk. The Commonwealth is essentially a ready-made trading network. It comprises a healthy mix of large and small, developed and developing, landlocked and island economies. It also contains some of the most promising emerging markets, such as India, Malaysia and South Africa. In 2013, Commonwealth members’ combined exports of goods and services were valued at $3.4 trillion—about 15% of the world’s total exports. Around half of this comes from developing countries. Given the growing significance of developing countries in the world economy, this presents vast trading opportunities for the Commonwealth.

I recently held in your Lordships’ House a debate on bilateral trade with Africa. One-third of African countries are Commonwealth members, including Mozambique and Rwanda, which are both members of the 7% club in Africa. I believe that the Commonwealth as a whole should be looking to capitalise on the many opportunities provided by the African continent. Trade within the Commonwealth must also be considered. Intra-Commonwealth trade now stands at $600 billion and is projected to pass $1 trillion by 2020. It is estimated that when both bilateral partners are Commonwealth members, they tend to trade 20% more and generate 10% more foreign direct investment inflows. It is thought that our historical ties, shared values, familiar administrative and legal systems, the use largely of one language and a strong diaspora community all contribute to these benefits.

With all this in mind, I welcome the new trade financing fund that will boost trade capacity for smaller and developing Commonwealth countries. This will in turn benefit us all. I would like to see greater exposure for the new Commonwealth Enterprise and Investment Council and proper recognition of the important role it can and should play.

There are of course challenges, one of which is climate change. Many Commonwealth countries have high export concentrations in a range of climate-sensitive sectors, including agriculture, resource extraction and fisheries. Some countries also need assistance with unlocking the full potential of their private sector. This includes issues such as infrastructure, access to finance and developing trade strategies. Commonwealth countries must work together to find solutions to these challenges.