Brexit: Commonwealth 'can't replace' the EU

Sir Don McKinnon
Sir Don McKinnon

Sir Don McKinnon says we shouldn't get our hopes up that Brexit will mean a boost in trade between New Zealand and the UK.

Not many picked the UK would quit the European Union (EU) before last Friday's vote. Sir Don, who spent eight years as Secretary-General of the Commonwealth, didn't see it coming either.

"I think they've forgotten all the benefits they were getting out of it," he told Paul Henry on Thursday.

"They were constantly reminded of all the problems -- the immigration problems, the refugee problems -- and they were the ones that ultimately said, 'we've got to do something about it'. But they're actually now beginning to realise the huge benefits, and losing those benefits over the next five to 10 years will be very painful." 

And they're unlikely to be replaced as a trading bloc by the Commonwealth.

"You can't replace one with the other," he says.

Though the vote came as a surprise, Sir Don says it was perhaps inevitable as Europe expanded.

"They moved too fast, too quickly across eastern Europe to bring them all in, thinking it could be a United States of Europe. There can never be a United States of Europe."

That's because the wealth disparity between European states is much greater than you'll find in the United States of America. At one end you have Bulgaria, with a per capita GDP of €6100, and at the other Luxembourg, with €91,600.

Sir Don says it makes sense to have free movement of capital, goods and services, but not people.

"Otherwise they'll all end up in the most successful country and vacate the least successful."

With one of the wealthier countries leaving, Sir Don says the EU is now significantly weaker and he expects Russia to take advantage.

"What is [President Vladimir] Putin going to do? He will see a rather weakened Romania, Hungary, Poland; will he take advantage of that and say 'hey, I can give you a better deal'."