CANZUK: Letting the adults into the room | Janice Seto

The CANZUK proposal – a trade alliance with Canada, Australia, New Zealand, and the UK – aiming for political traction reminds me of myself, embarking on world travel for the first time. To see the world beyond Ontario, a recently-graduated me recalled my first economics class with Mr Thomson: How to maximise my wants with limited resources. Though my enthusiasm to hit the road was boundless, I had only just enough in my modest bank account and I could count the months until age 28. In those days, young people could get heavily discounted airfare, train tickets and hostel stays, but the consensus was that age 27 automatically qualified you for adulthood and full adult fare pricing.

This ‘Discounts to destinations’ strategy meant invoking the concept of ‘satisficing’, in my case, I was sacrificing a great chunk of the world to maximise the number of places within my reach. I could reasonably go to the Lands of No: No language barriers, no onerous visa requirements, no currency restrictions, no frightening crime rate, no strange diseases. And ironically, the places which scored high in all the criteria above got shoved to the back of the line. These places where I could easily travel to, I could defer to middle age. ‘The years are plenty after age 35 to see Florida, the Caribbean, Gold Coast, Dunedin and Edinburgh,’ I rationalised.

On the other hand, as long as I had youth on my side, I was up for manageable exotic travel: non-potable water, Spanish wine, Dutch cheeses, Swedish meatballs, Slovak knedl’a, Japanese ryokan, Austrian hostels, Happy Valley racetrack, Pompeii and French crottoirs. So I saved up for my EuroRail Pass and finally activated it at the Gare Montparnasse.

Looking back, this strategy minimized decision fatigue, or at least the inverse relationship between age and the energy required to make logical decisions. Likewise, today’s COVID pandemic-impacted citizenry is bone tired of incessant decision making. I include myself – the pastor recently sent us off with the prayer attributed to St Francis of Assisi with the phrase ‘grant that I may seek… to understand rather than be understood’ – to which I muttered, ‘This stops here. I have had enough!’

Enough of doing the heavy lifting at the office. Enough of business partnerships which are not quite a meeting of the minds. Enough of people who refuse to understand your good intentions. Enough of those who look for offense. Enough of always having to be the adult in the room.

Nowadays, the fewer disputes brought for me to arbitrate, the better my life is. The less I need to be involved with, the less stress I have to deal with. I am better off with this Marie Kondo approach to business, people and anything online.

CANZUK is appealing precisely because of the zeitgeist of decision fatigue. The proposed trade alliance is an easy win for these participating countries that have much in common. Their approach to property rights and the common law system cannot be understated. As Sir Roger Scruton had written and spoken about in the run up to Brexit at the The Nexus Institute in 2015, the common law system was seen as a recalcitrant outlier among other EU countries with their top-down, Code Napoleon civil law system. The CANZUK four are also in effect the Five Eyes Alliance members, all of which have universal health care (The USA is memorably on its own when it comes to healthcare.) The benefits of familiarity and shared values portends a low maintenance trading future.

The drama queen-free CANZUK proposal is a mere blip on the radar screen of mainstream media because it is not eyeball-catching TV. In Canada, the centre right could not build on the traction of CANZUK supporter Erin O’Toole’s election as the new leader of the Conservative Party as COVID and other issues dominate the news. Indeed, the main political parties in Canada hug the centre – a country with a reputation of being polite finds extremism just not neighbourly. Living with nine months of winter and three months of bad skiing, getting along with other people in your neighbourhood is how you survive.

CANZUK is a preposterous idea, geographically. Most trade agreements are between contiguous countries (USMCA, EU, Schengen Zone, Mercosur) or countries in the same geographical region (ASEAN, Caricom). The CANZUK four are not even joined by contiguous time zones! At the last symposium I organized, hosting the live segment meant the Brits drank coffee to keep awake and the Aussies gwaffed espresso to wake up.

CANZUK does not make sense in the traditional trade model, but CANZUK indeed works in a world where connection does not depend solely on geography. CANZUK as a project has already been successfully piloted where it counts – among business and the mobile youth.

We Canadian young people do not have the culture of a gap year or two overseas that commonly sees young Australians and New Zealanders travel the world on working holiday visas. I occasionally meet adventurous Aussies with wishing to pursue a winter working in our ski resorts. More and more young Canadians are signing on to this gap year project via the working holiday program, SWAP, with the Canadian Federation of Students. This has resulted in a couple generations of young Canadians, Australians, New Zealanders, and Britons crossing paths and going on to launch their careers in each other’s countries.

Why has the CANZUK start-up been the best kept secret among the four nations of Canada, Australia, New Zealand, and the United Kingdom? Modesty is one of common factors these countries are in alignment on. We do not have a culture of shouting from the rooftops, which focus our efforts on getting along and, more importantly in terms of international trade, on getting things done.

Getting things done in business should never be difficult. Besides labour mobility, CANZUK would be formalization of the trade that already exists and that which is chomping at the bit in a digitized global economy. Businesses, SMEs and behemoths and JVs want to reach beyond their domestic borders and entrepreneurs logically head to smooth waters, where they can maximize their chances. Think of the production of medications, guaranteed vaccine supply and the experience of living in a region with a bigger neighbour. For those parties who see the world and how to go about doing things through a common lens, working together in person and virtually can lead to further innovations.

For too long, choosing to do business where fundamental differences are a bridge too far is predictably stressful and takes up scarce human resources. The reverse can be also true – choosing those with whom you share fundamental standards and quality measures obviates most challenges and you can get further ahead, faster. The easy win has everything going for it, the low hanging fruit is less demanding in both the long and the short run.

The quiet, incremental nature of a small CANZUK to me beats the splashy launch of something with a lofty mission and goals that proceeds the hard work of negotiations. It is tiresome to watch back-and-forths of this or that trade agreement post-announcement, and instead of buy-in, it turns off the populace. It is better to start off with an understated track record than a media sensation looking for something to declare victory on. In short, CANZUK is putting the horse before the cart.

In the 1950s, three small countries that cooperated post-WWII to work and trade together later formalized their trade agreements into Benelux. As their success grew, other countries clamoured to join. This became the European Common Market, which we can recall, was at its height with a small number of countries who met stringent criteria. Then the EU intentionally lowered its standards and accepted based on potential and hope in order to grow its membership. We do not need to look too closely at the past two decades to witness what happens when size matters more than it really should.

According to Andrew Henderson, author of The Nomad Capitalist, western countries including CANZUK – the ‘legacy brand countries’ – are stifling innovation and initiative through their high taxes and the fiscal burden of overreaching social programs and the welfare state mentality. An intentional CANZUK alliance would reset this perception, by enlarging the space so to speak, to encourage labour mobility, to expand horizons for opportunity and to support entrepreneurship.

Some pundits have criticized CANZUK as elitist and exclusionary of other countries in the Commonwealth. In short, the CANZUK idea has been accused of being an Anglosphere, which begs the question why the Hispanic equivalent – the OEI Organization of Ibero-American States – does not attract similar venom. The use of ‘Anglosphere’ may be code for ‘caucasian’, which I personally do not see when I look in the mirror. What I do see is that CANZUK at its heart is defiantly inclusive – they are four countries, each with a proven track record by any metric.

The best chance for CANZUK to be formalized, I propose the following incremental strategy:

  1. Mutual recognition of professional credentials such as nursing, accounting and teaching so as to enhance labour mobility.
  2. Expansion of the list of professions eligible beyond the current, short list that us part of USMCA / NAFTA. For over two decades, Bond University in the Gold Coast, Queensland has been offering Canadian students a tailored law degree that includes courses in Canadian law, making the process of qualifying back home more seamless.
  3. Enlarge professional education backgrounds beyond university degrees to Red Seal certified apprenticeships and other equivalences in trades and technology, thus addressing labour shortage in these skilled trades.
  4. Academic institutions (inspired by the Erasmus model) can offer research and teaching opportunities with partners across the CANZUK consortium. For example, civil engineering technologists in Australia could spend a semester in a Canadian partner institution for winter (January onsite exercises require a Canada Goose parka.) New Zealand vintners and Canadian wineries can learn from each other. Indigenous Australians and Canadians can develop community projects and Australia already is a model for Canadian fire prevention in a warming climate reality.
  5. Follow the USMCA and CER models rather than the EU model. Stick to your knitting – or Closer Economic Relations (CER) agreement between Australia and New Zealand – because a trading agreement should not be a precursor or the back door for something more. British philosopher Roger Scruton has criticized the EU for overreaching beyond the original mandate of economic expansion and trade; political unity became a ‘mission creep’ that citizens did not sign up for.
  6. Sovereignty is not on the table. The Five Eyes intelligence alliance is one thing in the terms of the international justice, but imposing legal rules across CANZUK jurisdictions is an entirely different beast. In the common law system, for example, Canadian judges may already look at and reference other common law rulings but are not bound by them.
    A bigger item is La Belle Province (Quebec), which continues to follow the civil law system modelled after the 1804 code Napoleon , putting it in in contrast to the rest of Canada. Quebec would look dimly on any hint of pre-Statute of Westminster 1931 i.e. UK suzerainty. Quebecois would be most vociferous on this matter, indeed many Canadians (myself included), who usually shrink from talk of constitutional amendments, would no doubt have a few choice words. Likewise, if Australia goes the way of Ireland with a president as head of state, that’s their business.
  7. Border control should remain solely with each member state. Put simply, visa entry requirements are no one else’s business. Australia and New Zealand have their Trans-Tasman Travel Agreement. Canada has provincial nomination programs when it comes to immigration. Without that sort of provision, UK border control has seen itself at the losing end when it comes the EU membership expansion.
  8. CANZ first, UK perhaps invited later. Canada, Australia, and New Zealand would be the most logical and most easily constituted members with much more in common, not to mention the Pacific Ocean. New Zealand and Australia has the aforementioned Trans-Tasman Travel Agreement. The Canada-Australia Consular Services Sharing Agreement, in place for over thirty years, has been enhanced with the Glasgow-Burchell Declaration (Australia-Canada Joint Declaration of Enhanced Diplomatic Network Cooperation).

In contrast, the UK gives off the ‘eau de desperation’. The urgency is all on the UK’s side, since they are rather desperate for any sort of win after that triumvirate of train wrecks: Brexit, Covid, and Euro Cup 2020. Australia, New Zealand and Canada have managed the pandemic in a much less chaotic manner than the UK, that is clear. Lacking any concrete plan post-Brexit vis-à-vis the EU, the UK political class is on the back foot, playing defence, and shorn of credibility.

None of the CANZ is eager to take on a British drama queen, and they have time on their side. British trade pundits have to wait upon an invitation from a nascent CANZ.

Being able to control the timetable, CANZ can decide to lobby for the easy wins. Incremental small victories would expand the appeal of deeper ties with a wider spectrum of voters in favour of further steps.

Each of the four CANZUK countries have individually been tried, tested, and true. Together, they are the real Fab Four. An A-list economic club in which everyone else wants to be with them. Truth be told, everyone else wants to be them. And being in a living room with other adults, that’s enough to make sound decisions.

Photo Credit.

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