Opening Speech by Lord Howell of Guildford, President of the Royal Commonwealth Society.
The Commonwealth summit and gathering of over 50 heads of government here in London next April presents a massive opportunity for Britain to set its new direction in the utterly transformed international conditions which are unfolding before us in the 21st century.
But as we proceed we need to bear mind one crucial factor about the Commonwealth. It is more than an assembly of governments and officials. It is a network of peoples – far the largest and most extensive in the planet . And like all large networks in the modern digital age it behaves and develops in ways of which conventional thinking and conventional diplomacy find hard to explain or keep track .
Some call it the fourth industrial revolution. Some call it the second globalisation wave. But I call it the hour of the Commonwealth network.
It is this network phenomenon which I want to enlarge upon this morning as you turn your thinking to the ways in which we should prepare for this great summit and what lies beyond it .
Why am I choosing this opening theme? Because the Commonwealth today is the newest and most dramatic example of a network in the modern sense which is living and growing as all networks do.
Trendy historians and journalists are churning out books and columns nowadays about global networks and clusters, and their predominance in the pattern of international events , as though they were new discoveries. But these are developments which some of us have been pointing out ever since the digital age began some 30 to 40 years ago . This the reason why we now see the world, and the UK’s position within it, in terms of ‘old links and new ties’ (if I may indulge in a literary selfie’), or to use Mrs May’s language ,in ‘old alliances and new partners’.
The hub and spoke model of the past typically put Britain at the centre of a sort of wheel with lines going out to all our Commonwealth partners, now 52 in number (with more lining up to join). The network and cluster concept is quite different. Instead of links from a central point to the various points on the rim there emerges a fantastic network of linkages without any particular centre. In the case of the Commonwealth this currently means not 52 connections but 1326 individual connections – a very different story!
Is this possible or practical? Yes ,in the digital age it now is. Of course some of the linkages will be stronger between bigger trading partners and associates and some will be thinner, but the modern network is a pattern without a dominant or dictating centre. Furthermore because networks talk to other networks all the time it is a continuously growing system, so that unless one is deliberately exclusive fantastic series of linkages opens up ready and in effect lead to networking the entire planet.
All networks of course require a framework or what used to be called in the language of the past a hierarchy of control and governance. Today the old links about which we are talking provide the framework and the new ties provide the explosion of connections and gravitational effects which now govern international trade, made vastly more powerful day by day by the emergence of new technologies such as block chains which allow the ever multiplying part of the microchip to handle and validate the commands, wishes and opinions of tens of millions of people instantaneously. There has been nothing like it ever before in human history.
However in making sense of this new world two cardinal points need to be born in mind.
The first is that the successful expansion of free trade depends not just on WTO rules but on trust and affinities between trading entities. In more practical terms successful trade depends upon intimate and closely linked patterns of finance, of trade insurance ,of common approaches on tax and interpreting a range of regulations.
This is a pattern which has to be replicated in relation to every market . An American shipper exporting into the EU has to conform with a vast variety of EU regulations and legal requirements as well, and dare I say it with the rulings of the European Court of Justice. The same goes for a Chinese exporter into the EU or a Japanese exporter into the EU. And the same will go for the UK, too, whatever the final outcome of our negotiations with the EU. Every market has its rules.
When exporting into the EU, just as much as into the USA, or China, or India, or Commonwealth countries, trust is the key . I have to say in passing that the present badmouthing of the European Union and the constant reference to our relations with it as seeking a deal what should really be described an agreement, hardly helps build up this trust were going to need in that direction .
Sometimes it seems as though our free trade economists and crusaders have never actually traded. If they had, they would appreciate that successful free trade under WTO rules (the ‘No Deal’ prospect), far from automatically ensuring a nirvana of flowing trade volumes, requires a massive amount of conformity with the systems , habits and jurisdictions of other markets. Trade requires trade relations – a whole hinterland of connections, understandings and friendships . A ‘No Deal’ outcome with the rest of the EU could turn out to be just as complicated and restrictive as any deal or agreement – maybe more so.
Nowadays trade expansion also requires lots of common understandings and trust in the fields of security and defence – an aspect of Commonwealth cooperation to which too little attention has been given, but is becoming increasingly vital to the health and growth of the network.
The second point to bear in mind is that services are the new growth area in international trade. They now make up 1/4 of all trade receipts and indeed McKinsey suggests that more than half the wealth generated by international trade comes from services and various forms of data transmission. All the trends point to much more expansion of trade in this form, especially with the growth of digital fabrication.
I am very glad to read that the government is aiming for a new global services trade framework – because of course the services aspect of the European single market has yielded very slim pickings over the years. I repeat that trust is even more the key ingredient when it comes to trade in services, data and knowledge products. And remember that the UK is overwhelming a services economy.
This is the aspect that seems to be forgotten even as we seek to expand our trade links within the growing Commonwealth.
Our relations with India are an example of where this aspect seems to have been forgotten at times – and let us not forget that India is at least half the Commonwealth and 1/6 of the entire human race . Trust means a high degree of mutual respect . It means treating the citizens of the particular country with whom one is dealing in a respectful and sympathetic way. It is quite deplorable that in our attitude to students from India we have deliberately discriminated in a hostile way, halving the number of Indian students here, seeing them diverted to America and to Germany and making life as difficult as possible for many newcomers and visitors from India . That is not the right basis of trust and of course no satisfactory expansion of trade will be built without that trust. Our actions harm ourselves, harm our brilliant universities and harm the Commonwealth.
So let us remember that while world free trade is a powerful force for good ,(and indeed the key means nowadays of upholding a rules-based order in a troubled world), the key ingredient is trust and it’s supporting pillars of common language, common values, standards and above all, respect for the rule of law, all underpinned by close affinities and feelings of fair dealings and friendship.
When I speak in those terms what am I really describing? The answer is I am describing exactly the nature of the modern Commonwealth network. The Commonwealth has emerged in the digital age in a way which is organic rather than governmental. It is increasingly woven together not so much by governmental linkages but outside government by professions, civil society and interest networks of incredible density and power.
I refer to the networks of scientists, of schools and universities, of creative industries, of parliamentarians, of doctors, of financiers, of farming reformers, veterinary experts, engineers, architects, environmentalists, of women’s groups of all kinds and all ages, energy and climate specialists, of judges, of lawyers ,small business promoters– the list goes on and on. The RCS-inspired Queen’s Commonwealth Canopy ( the forest conservation project), spreading across the globe, is a brilliant practical example .
These are the skills and binding forces which generate trust and attract capital investment, from which trade follows.
Networks grow all the time and connect with other networks all the time . Networks never rest. Networks open out links for the United Kingdom through the Commonwealth to the great trading groups in South-East Asia such as ASEAN, to the great trading groups around the Indian Ocean, to the entirely new networks and clusters forming in Central Asia, in Africa and in Latin America, and to NAFTA .
Indeed, in this new age I have heard the Commonwealth described as the “the mother of all networks”. It may not yet be quite that. But through the energy of its peoples, the understanding of its leaders and the unstoppable powers of communications technology that is what it is now destined to become.
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