European Union vs Commonwealth

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Article on Growth and Economic Comparative

Introduction

European Union vs Commonwealth – In light of the development around Brexit, the EU is still a very important partner of The United Kingdom. Though the trend is on the decline over time and has registered a steady fall of UK’s exports to EU from 54% to 46%[1] in only 6 years, this is now a complex game for EU where Brazil, China and 2/3^rd of Commonwealth nations are not interested to negotiate trade representative with EU. However, US, Canada and India are very much in progress with their negotiation for trade representative with EU. EU has very less trade agreement with commonwealth nations which is at present around 33%. As per South East England MEP Daniel Hannan[2], the IMF countries within EU is expected to grow with an average rate of 2.7% in next five years while the commonwealth is expected to surge ahead at 7.3%. The impact of future growth prospect has also started creating its own influence in Brexit development.

European Union vs Commonwealth – How UK Looks at Future Growth Aspect?

In the context of Brexit when UK withdraws from EU, UK should not compromise with EU and shall endeavor towards trade opportunities with Commonwealth, BRIC nation, NAFTA and other trading nations who are more aligned with its trading priorities. In such case, UK could seek aggressively futuristic longer-term trade with technological segments where EU has no agreement as yet. The countries in this segments are USA, Singapore and Japan[3]. It may be noted that one agreement with Korea took years for EU to materialize finally. The only one instance of favorable impact for having direct trade with US by removing trade barrier, may be considered as UK’s trade growth in the horizon of £4 to £10 billion[4]. This is difficult to ignore for the economist and politician. On the downside, of-late domestic risks in Europe have also increased. The unexpected re-lapse of Greece crisis could endanger entire investment decision reflecting low or negative economic growth. At the same time, if political challenges are not effectively dealt with at EU level, it could trigger major impediments of growth. In the longer-term, UK will have to look into the trading position with non-European nations such as Turkey, Mexico, Indonesia and Nigeria (the MINT

countries[5]). These nations are in position to provide greater opportunity with its encouraging projection of demographic for economic growth as they are touted as future economic giants.

European Union vs Commonwealth – Growth

When one looks at the growth potential, Commonwealth nations are growing more rapidly than ailing Eurozone. By the measure of World GDP share Commonwealth nations have overtaken Eurozone (as per 1973 definition) GDP by 2004. With the same measure, Commonwealth is slightly bigger that present Eurozone. After 1973, the economic has been accelerated in Commonwealth zone as compared to Eurozone where the growth has been decelerating slowly from the average level of 3.6% in 70s to meagre 0.7% in recent past.