Faced with deteriorating approval ratings, President Joe Biden could use a significant policy achievement. And Britain’s Conservative Party would benefit from a tangible post-Brexit victory as it manages an internal leadership crisis. Here is an idea with the potential to shake the world economy out of its doldrums, ease price pressures and labor shortages, and provide a strong counter to China’s economic ascension.
How about a sweeping deal linking the United States, the United Kingdom, Canada, Australia, and New Zealand? Such an agreement would be modeled on Europe’s Schengen Area, which eliminates harder borders between most of the European Union members.
The globalized economy of recent years is hyperefficient, but now, we are seeing a populist revolt against open borders — both in the U.S. and via Brexit in the U.K. The open world economy does not look so attractive anymore in light of tensions with China, pandemic-related supply chain problems, and Russia’s war in Ukraine.
Seemingly resilient supply chains are now revealed to be fragile as the world deals with computer chip shortages, stalled car production, and shortages of all kinds of goods. Further, the globalized pursuit of economic efficiency has led to over-reliance on autocratic nations with abysmal human rights records.
A new type of globalization appears to be forming based upon integration with reliable trading partners who share common cultural values. A striking recent example is Europe’s pivot away from Russian energy. With all this in mind, perhaps it is time for a new kind of unfettered free trade deal that would enrich America and its closest allies — an Anglo free trade and travel zone.
This group of nations already shares a common history, culture, and language. They already cooperate and share critical intelligence (the so-called “Five Eyes” alliance). Why not go further and allow the completely free movement of people, goods, and capital? A simple but powerful agreement would specify zero tariffs on all goods and services among these five friends, with citizens of these countries free to live, work, or retire in any other member nation.
Imagine the synergies across this five-nation zone. Potential entrepreneurs in New Zealand would have new access to Silicon Valley’s startup environment and venture capital funding. Australian investment bankers could practice their trade in London, and British geologists could find work in Canada’s massive resource extraction sector. Travel and tourism would benefit from frictionless borders, while the free movement of people would provide new options for job-seekers or retirees in each of the nations.
President Biden needs a bold initiative, and soon. Congress could use a bipartisan political victory to restore its image. Both the president and Congress could improve their standing at home and among our closest allies with the Anglo free trade and travel zone. President Biden could reestablish his credentials on the world stage, and Congress could show its ability to govern. Why not start now?
Scott Niederjohn is a professor of economics at Concordia University Wisconsin and director of the Free Enterprise Center. Mark Schug is president of Mark Schug Consulting Services and professor emeritus at the University of Wisconsin-Milwaukee.
