Saturday, 6th October 2007

The UK Independence Party is backing the Commonwealth as the key to Britain's future in a globalised economy. In a radical policy paper, it calls for the creation of a Commonwealth Free Trade Area and renegotiation of our relationship with the EU on a trade-only basis.

"We support what is called globalisation in its true sense – that is, the growing inter-dependence of developed,  developing and undeveloped economies on the basis of free co-operation and competition," the policy paper says.

"This will not only encourage worldwide economic growth, with a consequent rise in living standards, but it should also reduce and, in time, virtually eliminate the reliance of poorer countries on large amounts of aid and unsustainable debt.

"We start from the point of view that the United Kingdom, as one of the largest economies and most important trading nations in the world, should act in both its own interest and in the interests of the wider world by taking the lead in the development of a genuine system of free trade.

"But it could only do so by dissociating itself from the protectionist policies to which it is bound through membership of the European Union."

The paper points out that the EU is not the free trade area many in the UK believed it to be when our entry was negotiated. "It is a Customs union that erects tariff barriers against goods from other parts of the world according to the perceived need or vulnerability of industries in member states able to persuade Brussels that they face 'unfair' competition from outside the bloc."

It accuses the EU of being a "uncompetitive, sluggish, over-regulated and declining model" of international trade and says Britain and the rest of the world would be better served by the formation of a free trade area based initially on the 53 countries of the Commonwealth.

The Commonwealth represents more than a third of the world’s population and contains no fewer than 13 of its most dynamic economies, including, of course, that of India, says the policy paper.

"It is estimated that by 2050 the Indian economy alone will be larger than that of the current 27-member EU. Bringing all these diverse countries together in a Commonwealth Free Trade Area (CFTA), and building on their own existing bilateral and multilateral trade agreements, would provide a spectacular boost to the cause of free trade across the world.

"The Commonwealth Business Council estimates that a CFTA would account for more than 20% of international trade and investment, trade exchanges of more than $1.8 trillion a year and direct foreign investment worth about $100 billion annually."

The policy says Britain should build on its proposed CFTA to conclude wider free trade agreements with other countries and use its financial and commercial resources to encourage investment and economic development in poorer countries with the aim of replacing "charitable aid" with trade.

UKIP proposes that withdrawal from the EU would be followed by negotiation of a trade agreement with the bloc that might be based on the European Free Trade Association, which Britain helped to found before joining the EEC in 1972. That was the route followed by Switzerland after a referendum rejected EU membership.

The policy paper warns, however, that EFTA would have to be reformed in order to distance it from the growing influence of the EU, which is causing significant problems for the Swiss in regard to domestic laws and regulation.

The policy on International Trade and Development is one of 17 papers to be published shortly by UKIP. 

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