South Africa Poised To Benefit From A No-Deal Brexit After Agreeing New Trade Deal With The Brits
The United Kingdom is one of South Africa’s largest trading partners, with bilateral trade of about ZAR 140 Bn in 2018. The UK has continued to be one of SA’s most famous export market not only for agricultural products, but also for manufactured and value-added exports.
The Cyril Ramaphosa-led country’s trade with the UK is under the European Union –Southern African Development Community Economic Partnership Agreement (EU-SADC EPA). For a long time, this has meant the trade agreements cease to apply if the UK exits EU, a scenario which has brought tensions to many countries trading with the UK under EU.
With the current trade agreement, 99 percent of SA goods enter the UK market duty-free or partially duty-free. In the event of a no-deal Brexit and an absence of a finalised EPA, trade between the two countries could go back to be controlled by the World Trade Organisation (WTO), this would mean SA would not continue to receive any perks or preference over other trade partners.
Members of Southern African Customs Union (Sacu) who include; South Africa, Botswana, Eswatini (Swaziland), Lesotho, Namibia, and Mozambique have been making strides to ensure their normal trade relations with the UK remain intact in case UK exits the EU.
The Southern African countries have succeeded in securing the future of their bilateral trade relations with the UK having concluded a new trade agreement. Ebrahim Patel, SA’s Trade and Industry Minister, broke the news yesterday.
A no-deal Brexit without new bilateral trade agreements would hit hard on South Africa’s weak economy resulting in massive job losses.
“The new agreement – to be known as the SACUM-UK economic partnership agreement – will effectively roll over and replicate terms of trade present in existing SADC-EU EPA (economic partnership agreement) including in respect of tariffs, quotas, rules of origin and health and safety standards,” the Minister said.
In the event the UK leaves EU on 31 October 2019, the new EPA will govern bilateral trade between the SACUM countries and the UK.
In a move aimed at ensuring a smooth transition of trade relations post-Brexit, the UK has completed trade agreements with several trading blocs and countries across the globe.
Featured Image Courtesy: dailymaverick