Sunday 20 November 2016

From Empire, to the Commonwealth, to the EU: How Did We Get Here? Where Now?


At the same time as the birth of the institutions that would lay the foundations of the European Union were born, there was also another set of ideas on the table in regard to the Commonwealth. The new Commonwealth was an organisation that grew out of the collection of nations that were once part of the British Empire. Today, the Commonwealth consists of 52 nations, many of whom are developing and most of whom are former British colonies. In this short essay, I will look at some of the ideas that may initially influenced the concept of the Commonwealth Free Trade Zone and look at the journey, from British Empire to Commonwealth to membership of the EU. I will look at the idea of the Imperial Federation and how the Commonwealth differs, I will look at the concept of "Imperial Preference" in trading and the economic zone, the "Sterling Area".

The ideals of the Commonwealth were inspired by the ideas of the Imperial Federation but took a much more egalitarian and inclusive approach to unification of the nations that were once part of the British Empire. Though, I disagree with the ideals of the Imperial Federation. I acknowledge it as something that we should understand in order to gain clarity about what the Commonwealth Free Trade Zone could be, an egalitarian movement for mutual prosperity and what it should not be, a reformation of British exploitation of the world.

The Imperial Federation was a popular ideal in Britain up until the breakout of WWI. The ideal of the Imperial Federation attempted to bring all colonies of the British Empire into a federation of states something like the US. Much of the idea was driven by the imperialist tendencies of the British Empire. At the heart of the notion of the Imperial Federation was an idea of British race nationalism that attempted to link the dominions together as a collection of "white colony's". The ideals of the Imperial Federation became increasing popular until in the late 18th and beginning of the 19th Century they were adopted by then Secretary of State for the Colonies, Joseph Chamberlain. Chamberlain believed in the centralisation of the armed forces of the various dominions of the British Empire and argued for a Customs Union and preferential trading between Dominions of the British Empire. At the time the scheme was abandoned as it was thought that it would, rightly so, interfere in the independence of the Dominions.



In 1932, the scheme for "Imperial preference" in regard to trading in the British Empire was adopted and the policy held until the beginning of WWII in 1939. In 1937, the policy of an "Imperial Federation" was again given serious attention by the British Government but was rejected by the Imperial Conference because of it's Imperialist nature that seem to interfere in aforementioned self-governance of the Dominions.

The Imperial Federation can be seen as the first attempt at developing Commonwealth economic relations. Today, the Imperial Federation would be rightly, rejected too but the concept of the Imperial Federation offers a precedent of trying to improve economic relations between what have become known as Commonwealth nations.

In 1931, quite a while before the concept of the Eurozone, what was known as the "Sterling Area" began to develop. The pound sterling was responsible for more than 60% of global trade at the time and was the world's most important currency and the City of London, the dominant financial centre. Nations pegged their local currency at a fixed rate to the pound sterling. The collection of nations that pegged their local currencies against the pound sterling became known as the "Sterling Area". In 1935 the economic zone was made official through legislation and became officially known as the Scheduled Territories but remained referred to as the "Sterling Area" by many. Some of the main participants in the "Sterling Area" included Australia, New Zealand and South Africa. At the time, more than 70 countries were pegging their local currencies against the pound sterling. Canada, though part of the Dominions pegged its local currency against the US dollar but created economic policies that were friendly to the pound sterling and became known as "Sterling Area Friendly".



In 1945, the Sterling Area was the largest currency bloc in the world, but WWII had severely weakened the British Empire. WWII had caused Britain to go into debt to the US to fight the cause. In the Post-war period Britain, depended on US financing to rebuild Britain after much of it was destroyed in the war. It was at this point that the Dominions and fundamentally the world began to look to the US as the new global power and nations began to look at the US dollar as the currency of global trade. The "Sterling Area" continued to exist up until 1979 but was not the same as it had been before. By 1972, the British Empire had been knocked off its perch and was a struggling former global power, without a global empire. Most of the nations had, rightly so, gained independence and Britain was looking for places to turn for economic safety and prosperity. Britain's search for economic safety began in 1963, when it first made it's application to the European Economic Community (EEC). An application that was turned down by French leader Charles De Gaulle. After the resignation of De Gaulle, Britain finally became members of the EEC in 1973.

But before becoming a member of the EEC there were a considerable number of issues that needed to be cleared up about Britain's relationship to the Commonwealth. In 1972 Britain introduced exchange controls into the "Sterling Area" which caused many to leave the economic area. France were uncomfortable about Britain's relationship with the Commonwealth, and perhaps wary of the potential of the Commonwealth to become a force, more powerful than the British Empire, where the former colonies were not forced participants but willing partners. In the end, the "Sterling Area" was phased out in 1979. Today France still has a "Franc Zone", where its former colonies use the French franc as currency or peg local currencies against it, however Britain and the Commonwealth nations do not have such an economic zone.



In 1973, when Britain joined the EEC, it was a decision not only to present Britain falsely as part of the European Community but to turn away from building relationships with Commonwealth nations. Though, it was partly an economic decision, it was also a decision driven by a Pan-European ideology. An ideology that sought to reject the relationships that were being newly developed around the world with the former colonies of the British Empire and to throw Britain's lot in with Europe.

Today, in the aftermath of the brexit vote, it is time to take a serious look at Britain and the Commonwealth's economic and trading history and examine new ways to build on the old relationships in a new paradigm, where we are partners with the former colonies and not imperialists. There is a precedent in the past for imagining, in part at least, what could be done today. There are definite issues around the way ideas such as the Imperial Federation and Imperial Preference and the Sterling Area were implemented and how they operated. There is a tinge of the old British racist and colonial attitude, but there is also food for thought about how to imagine our world, post-brexit.



Whilst the mainstream pontificate over the EU negotiations, I believe that we must look to Britain and world history and take on a more audacious project of building a Commonwealth Free Trade Zone that will bring prosperity not only to Britain but our friends in the Commonwealth across the world. Whilst the EU negotiations are important, now is the time to imagine a more audacious project than the EU that connects with our past and offers us a chance to make amends for Britain's colonial past by bringing prosperity to our kith and kin in the Commonwealth. A post-racial network of our friends and allies who share a history with us as part of the British Empire. Together, we can and must become a new Empire of the Commonwealth, not as subjects but as friends, in the birth of a New World Order, like no other.

God Save the Queen! God Save the Commonwealth! God Save Britannia!

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