Commonwealth warns of knock-on trade impact of Brexit
Sterling's exchange rate plunge could damage exports to Britain from Commonwealth countries, the 53-country body warned Wednesday, voicing concern at the potential knock-on effect of Brexit.
But while a weaker pound might hit exports to the UK, and be bad news for tourists and remittances coming the other way, Britain’s exit from the EU opened up the potential for new trade avenues, it said.
“The task for us now is to help the Commonwealth move from shock to solutions,” said Patricia Scotland, the organisation’s secretary-general.
“There is scope for the UK to really boost its trade with other Commonwealth countries,” mostly former British colonies.
The British government is vowing to boost its trade ties with countries around the world, including in its former empire, after Britain’s June referendum vote to leave the European Union.
But a new report Wednesday outlined potential post-Brexit problems for Commonwealth member states, home to a third of the world’s population.
It said trade, tourism services in small states, UK remittances, foreign direct investment flows and debt could be disproportionately affected by Brexit.
“An unfavourable post-Brexit UK trading regime and a sustained depreciation in the pound sterling” could have the hardest effect on Bangladesh, Belize, Botswana, Mauritius, Seychelles and Sri Lanka, the report said.
Britain accounts for more than 10 percent of those countries’ total exports — rising to 54 percent in Botswana.
Overall, Britain is the fourth largest importer of goods from the Commonwealth, behind the United States, China and Japan.
In 2015, Commonwealth migrants in the UK sent $12 billion worth of remittances to their families back home.
Remittances received from Britain make up 45 percent of total remittances in Cyprus, 33 percent in Kenya, 27 percent in South Africa, 23 percent in Australia and 18 percent in Nigeria.