CANZUK: An Agile, Competitive Alliance for the New Global Economy

As governments, businesses, and institutions adapt to rapid changes in the global economy, the proposal for a flexible and agile CANZUK stands on the cutting edge of a new reality. Yet, there’s no need for CANZUK to reinvent the wheel. Within the international system, architecture already exists to recognize such a trade agreement. Indeed, there’s even a potential for business growth through its overlap with existing trade agreements.


Certainly, CANZUK reacts to the lumbering international bureaucracies that have characterized international economic cooperation. Its proponents generally agree that EU-style unification of monetary policy, a supra-national court system, and a common Parliament is out of the question.


Nevertheless, all four potential CANZUK countries are members of the World Trade Organization (WTO), which establishes uniform global tariff standards for cross-border trade in goods and services. One of the exceptions to WTO tariff rules comes through establishing a “regional trade agreement” or RTA. Countries belonging to an RTA do not strictly have to belong to the same geographic region. They may give each other preferential access to one another’s markets, without losing their membership in the global trade club, as long as that RTA is notified to the WTO.


Meanwhile, Canada’s membership in the Canada-USA-Mexico Agreement (CUSMA) and the EU-Canada Comprehensive Economic and Trade Agreement (CETA) could allow market access for some goods and services in the US and European consumer markets – assuming that CANZUK products meet the rules-of-origin criteria for those trade agreements, and do not compete with domestic products unfairly. Similarly, CANZUK products could flow into the booming ASEAN market—through ASEAN members Australia and New Zealand—subject to similar rules.


That might make Canada a processing hub for products flowing into North America and Europe, while making Australia and New Zealand centres to process products aimed at the ASEAN market. The UK’s entry into a wide range of new trade agreements contain vast untapped potential here, too. Entirely new value-chain structures could spring up, taking advantage of the opportunities that CANZUK would make possible.


Though the movement for a free-trade agreement between Canada, Australia, New Zealand, and the UK is in its infancy, several polls indicate broad public support for the initiative – particularly for freedom of movement. Already, the Canadian Conservatives have adopted CANZUK as party policy, while the UK’s All-Party Parliamentary Group for CANZUK (APPG-CANZUK) enjoys broad, cross-party support.


CANZUK countries today enjoy a high standard of living, and foster strong cultures of entrepreneurship and innovation. By allowing goods, services, labour, and investment capital to move freely across member countries’ borders, CANZUK could give its businesses a competitive advantage in the global marketplace.

But CANZUK wouldn’t just work as an innovative set of trade policies to give our businesses a head-start. It would also work by reconfiguring their access to existing global markets. CANZUK isn’t just a clever idea: it makes good business sense, too.

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